North America has a new trade deal under consideration. On September 30, Canadian Foreign Affairs Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer announced that their countries had, with Mexico, reached an accord: the United States-Mexico-Canada Agreement (USMCA), just over a month after Mexico and the United States had announced they’d reached their own bilateral deal. USMCA, should it be ratified by all three countries, is intended to replace the 24-year-old North American Free Trade Agreement (NAFTA) and become one of more than 100 regional trade agreements (RTAs) including countries in the Western Hemisphere.
RTAs are trade agreements—including free trade agreements and customs unions—that involve two or more countries. Though the World Trade Organization (WTO) holds a principle of nondiscrimination between trading partners, RTAs are an exception: they are discriminatory in that they give signatories preferable access to markets that non-signatories don’t have.
There are varying opinions on the value of RTAs. Economist Jagdish Bhagwati has warned that such agreements create a “spaghetti bowl” effect that “clutters up trade with discrimination depending on the ‘nationality’ of a good, with inevitable costs that trade experts have long noted.” But Nobel Prize-winner Joseph Stiglitz describes them as “intermediate steps” leading to “a more open international set of arrangements.”
Where do countries in the Western Hemisphere stand? AS/COA Online looks at the number of RTAs each one has signed and how many other countries’ markets they can access through these deals.