06/24/2016 The Economist
WHEN Ronald Reagan, running for president in 1979, proposed doing away with trade barriers between the United States, Canada and Mexico, he did so with his usual hyperbole. It would show that Americans were still capable of “dreaming up fantastic deeds and bringing them off to the surprise of an unbelieving world”, he declared. The North American Free-Trade Agreement (NAFTA) signed by his successor, George H.W. Bush, and by his Canadian and Mexican counterparts in 1992 could not live up to such hype. But the benefits were still substantial, especially in the early years. Trade among NAFTA countries nearly quadrupled in nominal terms after the treaty took effect in 1994 (see chart). Northern Mexico industrialised. Productivity jumped in Canada, which had signed a free-trade deal with the United States six years earlier.