Document Type

Article

Disciplines

International Law

Abstract

n January 1, 1994, after intense and fractious debates, the North American Free Trade Agreement (NAFTA) finally went into effect.' By the end of that year, President Clinton, presiding over what many considered the high point of his presidential career to date, had already convened a Latin American Summit Conference in Miami. That conference approved a blueprint for further steps in trade liberalization in the re2 gion. At least outwardly, free trade seemed to be enjoying excellent health. Trade liberalization was making a relatively swift entrance into the lifeblood of the continent. Those were clear, blue sky days over the seemingly calm waters south of the divide. Somewhat unexpectedly, however, the devaluation of the Mexican peso arrived like a tempest and shattered the calm skies of free trade.3 In the wake of devaluation, the terms of the free trade regional debate may have been reshaped to an uncertain extent. These recent developments have forced us to face questions that a few months ago were mainly rhetorical.

The NAFTA initially concerned only the United States, Canada and Mexico. It was expected, however, quickly to expand to encompass Chile, Argentina, and possibly Colombia.4 This Article addresses questions which may have a significant impact on the pace of this predicted expansion of the NAFTA. Specifically, what is the effect of the sudden collapse of Mexico's peso on the NAFTA's future? This concern is associated with the alleged subsequent pressures that this currency crisis put on the U.S. dollar and U.S. currency regulators.5 Will the U.S. Congress be willing to negotiate a NAFTA expansion in the near future, and will U.S. public opinion, always doubtful about such moves, lend any further support? In addressing these questions, it is important to resist two potential dangers: the first involves panicking about recent events, and the second involves completely ignoring what has happened. And we have seen a tendency toward both throughout the first day of this symposium. In addition, this Article discusses the shortcomings of the U.S. process of entering into free trade agreements (FTAs), and suggests that further democratization of this process is necessary.

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