Summary: The North American Free Trade Agreement (NAFTA), a dramatic step in the process of North American economic integration, has generated much controversy over its potential impact. In the first volume of this report, GAO briefly summarizes major provisions of the agreement and discusses their broad effects on the economy, the environment, labor, and immigration. In the second volume, organized as a sourcebook, GAO gives more detail on specific provisions of the agreement. In particular, GAO examines the objectives of the negotiators from each country, the major components of the agreement, and the unresolved issues. The sourcebook provides information on NAFTA's (1) provisions to liberalize trade and investment in North America, (2) special provisions for trade-sensitive economic sectors, (3) rules to implement the agreement, and (4) potential impacts. GAO concludes that the agreement will yield both costs and benefits, with some sectors of the U.S. economy and work force shouldering a larger burden. For example, NAFTA may produce benefits at the macroeconomic level but at the expense of job losses in some industries, particularly among low-skilled workers. GAO notes significant weaknesses in the two major federal programs intended to help the adjustment of unemployed workers. GAO summarized these reports in testimony before Congress; see: North American Free Trade Agreement: A Focus on the Substantive Issues, by Alan I. Mendelowitz, Director of International Trade, Finance, and Competitiveness Issues, before the Subcommittee on Trade, House Committee on Ways and Means. GAO/T-GGD-93-44, Sept. 21, 1993 (18 pages).
