Beyond NAFTA with Three Countries: The Impact of Global Value Chains on an Outdated Trade Agreement

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ABSTRACT

This article shows how the North American Free Trade Agreement (NAFTA) is significantly affected by the redeployment of transpacific specialized value chains and production networks. More specifically, our study looks at the repositioning of NAFTA partners with new transnational production networks which point to the need for new trading schemes redeploying regional strategies on the transpacific axis. We used the ICT sector as an empirical case showing how China had become a key partner for the three NAFTA partners. This suggests changes in the process of regional economic integration/disintegration. Yet, a closer look at the global value chain of Apple indicates that US enterprises play a pivotal role in this transformation. Our findings point to the fact that the regional integration is significantly affected by emerging transpacific production networks linking the NAFTA regional trade pact to a new transpacific economic space. This can help explain the importance for the three countries to negotiate transpacific trade agreements like the Transpacific Trade Partnership which can be viewed as a de facto renegotiation of NAFTA, 20 years after its emergence as a regional trading model.