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We build into a Ricardian model sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in production to quantify the trade and welfare effects from tariff changes. We also propose a new method to estimate sectoral trade elasticities consistent with any trade model that delivers a multiplicative gravity equation. We apply our model and use our estimated elasticities to identify the impact of NAFTA's tariff reductions. We find that Mexico's welfare increases by 1.31%, U.S.'s welfare increases by 0.08%, and Canada's welfare declines by 0.06%. We find that intra-bloc trade increases by 118% for Mexico, 11% for Canada, and 41% for the U. S. We show that welfare effects from tariff reductions are reduced when the structure of production does not take into account intermediate goods or input-output linkages. Our results highlight the importance of sectoral heterogeneity, intermediate goods, and sectoral linkages for the quantification of the welfare gains from tariffs reductions.

The article deals with the relationship between the United States and Mexico from the perspective of the US national security. The key areas of strategic interest in Mexico on the part of the United States include: limiting illegal immigration, fighting drug-related crime, economic cooperation, both bilateral and in the wider international dimension, for example the North American Free Trade Agreement. According to the United States, all three factors and their successful implementation are necessary and constituent elements of the national interest of the United States in its most important scope, that is, in increasing the security of the state. The analysis focuses on the U.S. economic relations with Mexico at the turn of the 20th and 21st centuries. The basis of economic relations between these countries is the North American Free Trade Agreement. The genesis of the NAFTA agreement and its effects on mutual relations in the context of the U.S. national interest and security was presented. Additionally, the reasons for President Donald Trump’s change from NAFTA to USMCA are described, from the perspective of U.S. strategic interests.

Recent decades have witnessed a surge of trade in intermediate goods and a proliferation of free trade agreements (FTAs). FTAs use rules of origin (RoO) to distinguish goods originating from member countries from those originating from third countries. We focus on the North American Free Trade Agreement (NAFTA), the world’s largest FTA, and construct a unique dataset that allows us to map the input-output linkages in its RoO. Exploiting cross-product and cross-country variation in treatment over time, we show that NAFTA RoO led to a sizable reduction in imports of intermediate goods from third countries relative to NAFTA partners.

We investigate the validity of the environmental Kuznets curve (EKC) hypothesis for the NAFTA countries. In this investigation, we approach this hypothesis from a different methodology and propose employing the ARMEY curve hypothesis since the mathematical-functional propositions of both hypotheses were constructed on the same inverted U-shaped relationships. Thus, for the first time, it can be interpreted that the EKC hypothesis is empirically tested through a transmission mechanism of the ARMEY curve hypothesis in a single composite model. Therefore, this approach makes our study different from all empirical studies in the relevant literature. We apply the Augmented Mean Group (AMG) estimator to this aim. Empirical findings indicate that the ARMEY curve hypothesis was verified only for the USA. However, this new approach proposed in this study cannot test the EKC hypothesis through the ARMEY curve model for any NAFTA country since this approach requires verification of the ARMEY curve hypothesis and a significant composite model for the same NAFTA country. If our composite model was significant, it might make it possible to numerically determine a maximum real GDP per capita level that would minimize or maximize CO 2 emission levels for the USA. Therefore, this study introduces-proposes this new methodology as an alternative way of testing the EKC hypothesis in the relevant literature for future empirical studies.

Using U.S. Census data for 1990 to 2000, we estimate effects of NAFTA on U.S. wages. We look for effects of the agreement by industry and by geography, measuring each industry's vulnerability to Mexican imports and each locality's dependence on vulnerable industries. We find evidence of both effects, dramatically lowering wage growth for blue-collar workers in the most affected industries and localities (even for service-sector workers in affected localities, whose jobs do not compete with imports). These distributional effects are much larger than aggregate welfare effects estimated by other authors.

Under what conditions do states withdraw from intergovernmental organizations (IGOs)? Recent events such as Brexit, the US withdrawal from UNESCO, and US threats to withdraw from NAFTA, NATO, and the World Trade Organization have triggered widespread concern because they appear to signify a backlash against international organizations. Some observers attribute this recent surge to increasing nationalism. But does this explanation hold up as a more general explanation for IGO withdrawals across time and space? Despite many studies of why states join IGOs, we know surprisingly little about when and why states exit IGOs. We use research on IGO accession to derive potential explanations for IGO withdrawal related to domestic politics, IGO characteristics, and geo-politics. We quantitatively test these potential explanations for withdrawal using an original dataset of 493 IGOs since 1945, documenting about 200 cases of withdrawal. We find that nationalism is not the key driver of IGO withdrawals in the past. Instead, we show that geo-political factors – such as preference divergence and contagion – are the main factors linked to IGO withdrawals, followed by democracy levels in the country and organization. These findings have important implications for research on the vitality of international organizations, compliance, and the liberal world order.

We explore the impact of local legitimacy on the imitation of certification by subsidiaries of foreign multinational enterprises and domestic firms. We propose that MNE (multinational enterprise) subsidiaries and domestic firms differ in their propensity to imitate geographically proximate firms when deciding whether to adopt national vs global CSR (corporate social responsibility) certifications for two reasons. First, there are differences in the legitimacy they can expect to gain in different communities from adopting these certifications. Second, there are differences in their knowledge about the local legitimacy of these certifications. We test our hypotheses by studying the decisions of automotive suppliers in Mexico to certify either to ISO 14001, a global certification, or to Clean Industry, a national certification. We find that geography matters: MNE subsidiaries imitate national certifications by geographically proximate firms to overcome a liability of foreignness, while domestic firms imitate global certifications by proximate firms to overcome the disadvantages of localness. We explore the implications of our findings for institutional theory and future research.

Canada is widely regarded as a pro-arbitration jurisdiction. Yet the role of domestic judges in investor-state dispute settlement remains significant, particularly in arbitrations that do not take place at the International Centre for Settlement of Investment Disputes (ICSID). Unlike ICSID, which provides a self-contained system for enforcement and annulment, investment treaty arbitration conducted under other arbitration rules are subject to judicial oversight. This article examines how Canadian judges have approached set-aside proceedings in non-ICSID cases, with a particular focus on the standard of review applied under Article 34 of the UNCITRAL Model Law on International Commercial Arbitration. The article contends that Canadian judges play a pivotal role in shaping the interface between international investment law and domestic legal principles. In this context, this article argues that the degree of deference shown by Canadian judges to investment arbitral awards should be understood not as judicial restraint per se but, rather, as respect for the distinct legal order constituted by investment treaty arbitration and the UNCITRAL Model Law — a legal order that is international in nature and grounded in a shared global understanding of review standards. Through an analysis of key judicial decisions reviewing investment awards — specifically, the North American Free Trade Agreement Chapter 11 awards, this study explores the extent to which Canadian judges have embraced an internationalist perspective. The article concludes that, while Canadian judges claim to be pro-arbitration, this does not necessarily equate to deference towards investment arbitral awards. Le Canada est reconnu comme une juridiction favorable à l’arbitrage. Pourtant, les juges canadiens jouent un rôle déterminant dans le règlement des différends entre investisseurs et États, surtout dans les procédures d’arbitrage non régies par le Centre international pour le règlement des différends relatifs aux investissements (CIRDI). Contrairement au CIRDI, qui prévoit un système autonome d’exécution et d’annulation, les procédures d’arbitrage fondées sur les traités d’investissement relevant d’autres règles demeurent soumises au contrôle judiciaire des juges nationaux. Cet article analyse la manière dont les juges canadiens abordent les recours en annulation dans les affaires non-CIRDI, en particulier la norme de contrôle appliquée en vertu de l’article 34 de la Loi type de la CNUDCI sur l’arbitrage commercial international. Il soutient que le degré de déférence manifesté par les juges à l’égard des sentences arbitrales d’investissement doit être compris non comme une simple retenue judiciaire, mais comme l’expression d’un respect envers l’ordre juridique distinct constitué par l’arbitrage fondé sur les traités et la Loi type — un ordre de nature internationale, fondé sur une compréhension commune des standards de révision. À travers l’étude de décisions clés sous le chapitre 11 de l’ Accord de libre-échange nord-américain , l’article explore la mesure dans laquelle les juges canadiens adoptent une perspective internationaliste.

In force since 1994, the North American Free Trade Agreement (NAFTA) is still the most comprehensive agreement ever developed, conforming to the world’s largest trade market. However, the environmental impacts cannot be neglected, particularly greenhouse gas emissions. The environmental Kuznets curve (EKC) hypothesis is revisited, studying Canada, Mexico, and the U.S.A. in relation to carbon dioxide (CO2) emissions, gross domestic product (GDP), energy, and exergy consumption. Ordinary least squares, vector autoregression, and Granger causality tests are conducted. Additionally, exergy indicators and the human development index (HDI) are proposed. Results for Mexico and the U.S.A. describe similar and interesting outcomes. In the search of the environmental Kuznets curve (EKC), the EKC hypothesis is confirmed for Mexico and the U.S.A. However, for Canada, the EKC hypothesis does not stand. The Granger causality test displays the existence of a uni-directional causality running from CO2 emissions to economic growth; a similar behavior was observed while testing the for the exergetic control variables. The most intriguing Granger causal results are those from the U.S.A. A bidirectional relation was observed between exergy intensity and CO2 emissions. Moreover, the EKC curve was plotted by both variables. Furthermore, Mexico’s outcomes reveal that increasing renewable exergy share will decrease CO2 emissions. On the contrary, increasing HDI will grow CO2 emissions. Policy implications arise for NAFTA countries to minimize CO2 emissions by means of the growing renewable energy share. Exergy tools offer an appealing insight into energetic and environmental strategies.

This study examines the nexus between renewable energy (RE), economic growth (ECOG), technological innovation (TEI), CO2 emissions, urbanization (URB), and life expectancy (LEX) in NAFTA countries driven by the sustainable development framework. Using advanced wavelet coherence with data from 1990M1-2023M12, along with WAMC techniques, the analysis revealed intricate temporal and frequency-based interactions. Technological innovation and renewable energy boost life expectancy by reducing environmental degradation. As for urbanization and economic growth, these modified results anticipate dependent variables by the quality of infrastructure and policies. In the short run, tested causality relationships between variables show non-directional, while medium- and long-term scenarios evidence mutual reinforcement of the variables with life expectancy leading to renewable energy adoption and emissions reduction. The tests confirm WAMC’s almost perfect integration of factors within time scales, stressing thus their collective outcome on life expectancy. Therefore, this study emphasizes the status of appropriate sustainable policies integrating health, energy, and environmental objectives and creating effective measures toward long-term sustainability in NAFTA.