Trump And Free Trade With Canada And Mexico

Long history of free trade

NAFTA, established in 1994, created a North American free trade bloc that eliminated most tariffs on trade between Canada, the U.S. and Mexico.

It replaced the Canada-U.S. Free Trade Agreement, in place since 1987, which eliminated barriers to trade in goods and services between Canada and the U.S.   Before that, the Canada-U.S. auto pact, in place since 1964, eliminated tariffs on automotive products in return for a share of auto assembly in Canada.

NAFTA, the North American Free Trade Agreement, established in 1994, has become exhibit A on how "we lose" on trade. After all, many American jobs have been "outsourced" to Mexico. But that looks at but one side of the ledger. That an American pays less for certain things frees up capital to spend on something or on someone else. A machinist sees his job "shipped to Mexico," but the planner or analyst hired by a company with the "savings" might not see the direct relationship between free trade and the fact that he or she has this new job. When NAFTA was debated, businessman and presidential candidate Ross Perot predicted "a giant sucking sound" as jobs and incomes would be lost to Mexico.

Trump went on to say that NAFTA is not "fair."

"We're being defrauded by all these countries," he said, taking in Canada as well as Mexico.