Case Scenario:
The case explores the implications of regional economic integration for various groups. Under the North American Free Trade Agreement (NAFTA), Mexican truckers were to have been allowed to drive their trucks directly into the United States and avoid the costly and time consuming border unloading and loading that took place prior to the agreement. However, fearing job losses in the industry, the U.S. Teamsters Union rigorously opposed the legislation. Although the group ultimately lost its fight, the United States still did not give Mexican
truckers freedom to deliver their goods, prompting Mexico to institute retaliatory measures affecting $2.4 billion of goods exported from the United States. Discussion of the case can revolve around the following questions:
QUESTION 1:What are the potential economic benefits of the trucking provisions in the NAFTA treaty? Who benefits?
QUESTION 2: What do you think motivated the Teamsters to object to the trucking provisions in NAFTA? Are these objections fair? Why did Congress align itself with the Teamsters?
QUESTION 3: Does it make economic sense for the United States to bear the costs of punitive tariffs as allowed for under NAFTA, as opposed to letting Mexican trucks enter the United States?