Modernizing NAFTA: A New Deal for the North American Economy in the Twenty-first Century

CIGI Paper No. 123

March 30, 2017

Whether Canada, Mexico and the United States will succeed in renegotiating the North American Free Trade Agreement (NAFTA) remains to be seen. What is sure, however, is that NAFTA is now more than 20 years old and, as a result, it would benefit from being modernized to reflect North America’s twenty-first-century economic reality of “making things together.” Relying in several instances on the Comprehensive Economic and Trade Agreement between Canada and the European Union, and the now-suspended Trans-Pacific Partnership Agreement, this paper proposes changes and additions that should be part of an updated NAFTA. The focus is on the NAFTA elements that have been subject to criticism since the agreement’s entry into force. It offers a fairly detailed road map to the agreement’s modernization. This paper does not, however, provide a chapter-by-chapter, article-by-article review of NAFTA. Regardless of the rhetoric coming from the Trump administration, it is the authors’ view that Canada’s position should be to approach any NAFTA renegotiation from a “best case” perspective in view of making trade and investment in North America easier for business. Only in this way is Canada likely to get the best deal possible for its own economy, as well as for the American and Mexican economies.

About the Authors

Patrick Leblond is a CIGI senior fellow and an expert on economic governance and policy. He is an associate professor and holder of the CN-Paul M. Tellier Chair on Business and Public Policy at the University of Ottawa.

Judit Fabian is a post-doctoral scholar in the School of Public Policy’s International Policy and Trade Division at the University of Calgary.