Chair: Soumyadeep Chatterjee
The North American Free Trade Agreement or NAFTA came into force in 1994, creating a trading bloc with over 400 million people, and reducing barriers to trade and investment between the three signatories - the US, Canada and Mexico. 23 years later, the effects of this agreement vary widely between the countries - in the US, large gains in certain sectors such as energy, agriculture and appliance manufacturing have been contrasted by an estimated loss of 700,000 jobs due to the availability of cheaper labor. In Mexico, the maquiladora industry has largely contributed to US FDI jumping from below $20 billion in 1994 to almost $100 billion in 2015; however, the per worker compensation has barely increased, with wages not reflecting productivity due to a general downward pressure on wages. Further, the influx of US subsidized agricultural goods outpriced local farmers, resulting in almost 5 million displaced people. Lastly, Canada saw its US FDI stock, exports to the US as well as bilateral agricultural trade triple, while productivity remains low.
With a shift in US policy from the perceived protector of the agreement to a more open position in the midst of disquiet in Mexico, President Trump, Prime Minister Trudeau, and President Enrique Peña Nieto have sent bureaucrats to discuss the current situation, and deliberate to come up with a revised agreement – in theory, at least. With a clear consensus nowhere in sight so far, there is every possibility that the agreement will collapse resulting in economic peril, with delegates maneuvering the volatile situation to fight to ensure their country’s prosperity.
Letter from the Chair
My name is Soumyadeep Chatterjee and I will be your Chair for the NAFTA committee at LAMUN XII. I was born in India, but spent the vast majority of my childhood in Oman. During my time there, I had the opportunity to travel all over the world, and was exposed to a plethora of peoples and cultures, which has greatly influenced my worldview. I’m a third year Electrical Engineering major with a minor in Accounting; I enjoy watching soccer and having a pint when I’m not buried under heaps of coursework, which, as you may imagine, is not too often...
The North American Free Trade Agreement has received a lot of media coverage of late, with President Trump stating his intention to revamp the deal numerous times during his election campaign. The US and the other signatories, Canada and Mexico, have had vastly different outcomes - while the US and Canada have seen gains in several large sectors, Mexico has seen workers’ wages and productivity hit rock bottom. With discontent growing, the three countries have thus decided that 23 years after its ratification, NAFTA needs to be reexamined, and adjustments may have to be made to adapt to the current situation. As bureaucrats from each country, you will meet in a unique setting to discuss and lobby your interests. Obviously, every action or even inaction may result in a drastic outcome - time is not on your side as the world’s markets await your decision.
With such a wide range of possible outcomes, I urge you to not limit your research to this background guide; delegates who are able to delve deeper into the topic and think outside the box may find themselves at an advantage here. The future of over 400 million people is in your hands now - may they have a stable and prosperous future.
Feel free to reach out to me with any questions that you may have with regards to this committee, LAMUN or UCLA. I eagerly wait to welcome you in person at LAMUN and wish you all the very best.
Chair | NAFTA | LAMUN XI