A Free Trade Agreement of the Americas is envisioned. The Agreement would include all countries in the Western hemisphere (with the exception of those such as Cuba, which the United States boycotts). The movement toward the expansive Free Trade Agreement of the Americas is two decades old, but has lost some steam as the major Latin American countries appear to be beginning to tire of negotiation with the United States. In such negotiations, the United States tends to give little, but demand much.
The North American Free Trade Agreement (NAFTA) became effective on 1 January 1994. Under NAFTA, virtually all trade barriers between the United States, Mexico, and Canada are eliminated, creating a single, unified North American market of 360 million persons (Magnusson, 1992).
When NAFTA negotiations were initiated, the United States was beset by staggering international trade deficits, a critical dependence on foreign energy supplies, and a fear that it would, over the coming 50 years, be excluded from a leading role in the international economy. Without any doubt, the Bush Administration looked to a North American free trade agreement as the Reagan Administration viewed the Canada-United States Free Trade Agreement (FTA) รน a way out of the country's international trade deficit. The Reagan Administration hopes were dashed to a great extent because one result of the FTA was not a combination of a massive increase in American exports to Canada, together with a reduction in Canadian exports to the United States. Because of the lower wage rates and lower taxation levels in the United States, Canadian firms in large numbers either relocated to the United States or they established production facilities in the United States, while American firms, also in large numbers, either closed down or scaled down their Canadian operations. One result of these combined actions was a reduction in the level of Canadian exports to the United State...