before? has approved palcohol. all you do is add water and stir, it goes on sale this fall. that's it for this hour. inside story is next on al jazeera america. >> both its biggest fans and owe knowns said nafta would bring big changes. now who is right about nafta, that's next on "inside story."

>> hello, i'm ray suarez. nafta looked at trade between the u.s. canada and mexico an said mor more or less let's getd of the barriers, the technica technicalities and barriers. nafta negotiated under president george h.w. bush, ratified by president clinton, how has the north america trade worked? we will look at in fact from the american point of view, and we talk less, it seems, from a worker in québec, a grocery shopper in tolucca and edmonton. we'll look at that today.

we'll begin with a look back at what is in the law and the memories of the chief negotiators. the mammoth nafta treaty when the united states, canada and mexico opened a market when globalization was in its infancy. now today trade of $17 billion annually. out of all of the trait, the three countrie--afterall the tre companies do in the world, those against it say the treaty hurts jobs. i sat down with karla hills with her thoughts on the treaty she helped write and it's impact today. >> what did all of the partners have that the other partners thought would be useful? were there things about canada,

the nature of its economy, about mexico and the nature of its economy that made it a good fit for trade in the united states? >> when we started talking about it, when i was approached in january of 1990, we began to talk about how our two economies could work efficiently together. at that moment mexico was highly restricted. we wanted that market. 100 million people, 100 million consumers, we wanted open market. both parties did. it was only when the rumor got out that we were speaking that we got a phone call from canada saying, wait a minute, you just finished a trade agreement with us, you're going to leave us out of this? >> now that we're at

ratification plus 20, is the average american better off than he or she would have been absent nafta? >> i think when you take an average figure there can be no question about it. that our nation has expanded it's gdp. there are studies that show that the opening of trade generates household wealth that is substantial. that we have become much more competitive globally. what we have achieved is tremendous specialization as a result of our inner connectivity. you know, most of the people who criticize the nafta focus on mexico, they focus on has this

been good for americans? i point out that at 14% of our total world exports go to mexico. that's more than what we sell to all the rest of latin america. it's more than what we sell to great britain, germany, france, and the netherlands combined. it's more than we sell to the brazilians, the russians, the indians and chinese. this is a great market, so was nafta good for the united states? you bet it was. >> when go into walmart, target, a similar store, much of what you shop from is made elsewhere on the planet, not in the united states. did nafta fulfill ross perot's threat of the giant sucking gland history teaches us when you take these skills away from

people, you destroy those skills, but most importantly you destroy their self-respect, pride and dignity. >> ross perot was in error on the sucking sounds going south. what has taken effect is globalization. we're much more inter connected as a world. jobs are moving around as products are moving around. and you mentioned the shelves of walmart and others, but when i had my last year in office as u.s. trade representative i would go on the floor of a manufacturing facility, and it was teeming with people. people screwing in bolts here. you went on an auto manufacturing floor, and you stumbled over people. today you go on an auto factory floor, i don't care if it's in the united states, japan, or china, there is nobody there.

it's done by technology, by computers. so the world has changed. take your mind back to 1992, you probably didn't have a laptop in your briefcase, so we didn't deal with the digital issues, telecommunications issues. those are issues we need to deal with. >> now there is a new urgency to tie nafta to another trade deal, the trans-pacific partnership. the u.s. canada and mexico are a quarter of those negotiating with the tpp. china is not involved. recent tpp negotiations focused on tariffs, environmental protections and intellectual property. if signed it will encompass 40% of the world's gross domestic

product. joining us to mark the 20th birthday of the enactment of the north america trade agreement, gentlemen, welcome to "inside story." >> thank you very much. >> thank you very much. >> we heard from karla hills, who was there at the beginning. ambassador, is nafta popular in canada? >> it is very popular. trade with the united states and mexico is extremely popular. i think that for our purposes we, when we're here in washington we point out that canada is united states' largest customer. we buy more goods from the united states than the whole european union put together. so i think sometimes we talk about trade agreements in abstract terms, and we have to be more effective in talking as

customers to each other. >> so is someone standing in an edmonton supermarket or driving a truck in québec, if we stopped and asked them, did nafta work out for you? what would they say? >> i'm sure you would differing opinions i'. i'm sure you would have people who are skeptical of nafta and people who are positive about nafta. trade fo with the united statesd mexico is good for our economy and good for our neighborhood. >> is nafta popular in mexico? >> i think it is very popular. i think after 20 years what we have achime achieveed in trade e united states and canada and once more the deep level of

value-added trade. we're the second largest customer of the u.s. as the ambassador was saying, and this is something which is normally taken for granted. we sell a lot to the u.s. the u.s. is our largest market. many u.s. jobs depend on how much mexico buy from the u.s. and many jobs in the u.s. depend on how much canada buys from the u.s. we actually have figured out to really build together and market together here and in this market, and in north america and to the rest of the world. >> does that answer depend on where you are in the country? if i'm in a farm in central mexico that used to grow corn would that farmer tell me that nafta has been good for him? >> i think it is. i think opening the market has changed the way we price corner,

and with international prices going up, this is commod commodd so farmers selling corn are doing better. we sell a lot of fresh produce, avocado and do ma tomato, and w, so in that sense we have a balanced beneficial approach on both sides. >> we're going to take a short break. when we return we'll continue this rare joint interview with the mexicaned a bass der to the united states and the canadian ambassador to the united states. inafta 20th anniversary.

stay with us.

>> welcome back to "inside story." i'm ray suarez. it's been 20 years since the enactment of nafta. it created a fast free trade zone between the united states, mexico and canada, and on this edition of our program we're marking it anniversary with a closer look at the impact to our neighbors to the north and south. did nafta become less important because something that we couldn't have really known about in 1990 when it was being negotiated, and that is the rise of china. did china end up being a player in a way that we couldn't have

imagined. in 2001, mexico had 271% wage differential with china. today the less than 10%. in terms of opportunity costs we are very competitive. so we with are getting back many new investments that are now seeing north america, mexico, of course, but as i said, ins a shared production team. does that change the conversation with americans in because for

a long dime, that ross per row talk, about the giant sucking sound, a lot of jobs did leave, they didn't get to mexico, they went to china. >> they did, and now they are coming back. in that sense, and of course the only silent sucking sound we hear in mexico is u.s. -- is mexicans actually consuming u.s. products and canadian products. so this is a totally different approach. has a manufacturer has the same as one in michigan or ohio. >> yes, they have had a lot of the same pressures. partly based on technology, and the changes in technology. partially based on some outsourcing to countries. like china.

if you go to a boeing plant in my old province, the technology, the kind of skills and the people you need and the training that has to go their jobs is quite different than what it was 20 years ago. we with have is to continue to work on having a predictable intellectual property regime. we have to train people for those skill jobs even though there's less of them, we can do a better job i think in north mesh, training people for those. we can't stand still, we have is to keep moving forward with agility and knowledge of how to best

improve in our neighborhood. >> are they stronger in their efforts to mold on to what they have, is to be competitive than they are as individual countries in. >> well, we are stronger as a neighborhood. that's predictable, affordable, reliable new jersey. when you look at the forms to allow for some private investment, into their oil sector, when you look at thetic vagues, and developments in canada, when you look at the developements in the united states on the energy side, in this neighborhood, of north america, we have an incredible amount of resources, we can question have liability energy standards.

how do we continue to work on a sustainable economy but also a reliable energy economy. it gives us a huge advantage, not only with china but the rest of the world, so i think that's a great realty that we with have today, when the three leaders meet. >> ambassador, your colleague brought up energy resources and that was one with thing that was purposely kept out. and mexico has very jealously guarded it's ability to hold on to the national oil company. as a state enterprise. s that going to change? is that something that's in the interest not only of mexicans but of all north americans to allow more investment? what we are doing is to open the sector for private investment, or domestic and foreign, to actually get licenses, in the territory, to exploit hydrocarbons and of course invest in

electricity, and also in the infrastructure needed to actually produce a lower cost of energy for company doing business will be you see the region, it is not coming from a political statement, it is coming from a market reality, and also from the three countries being blessed by nature. and in this sense, mexico is now looking forward, to get the best use of it's resources, from these reform, which was of course, unthinkable 20 years ago. but as we with said with energy, there are two good moments to plant a tree, 20 years ago, and right now. right now we are planting the tree of structural reforms in order to take the cost of france actions in general down. and this is going to enhance the competitiveness of our shared space, north america.

>> we will take a short break, when we come back, a look at the world of the 90's and the turn of the century that wasn't anticipated and the futures of the mexican, canadian, and american economies. this is inside story.

welcome back to inside story. i'm rare swarez. on this edition, we are, maaing the 20th anniversary of nafta. the north american free trade agreement. the ambassadors to theth united states, from mexico and canada, eduardo ma dino mora, and gary dur. you can never, when you are negotiating a reality, anticipate everything that is going to happen. right now, ambassador, the united states is waiting for a time decision on keystone, you mentioned it in the last segment, a pipeline that will bring canadian energy resources down

through the mississippi basin to the gulf of mexico eventually. how come something like that doesn't fall under nafta. and it doesn't p just fall under the mechanism of nafta to get worked out. >> well, we have about 80% of our trade free as they say on energy, oil is coming down from canada. we have gone from about 19% so called foreign oil with the united states four years ago to 32%. it is just coming down on rail. with high ghes and higher risk. so the debate. >> instead of the pipeline.

>> so the debate about a pipeline is not whether the oil is coming down, people allege it won't, but they are wrong. it's a question of how it gets there. we think the safer way to send it the way the state department has articulated it with their state department report. so we hope science, and merit, makes the final decision on how it gets there. it is getting there. it is getting to the gulf coast, it is just on rail. >> looking back to when nafta was negotiated we had just been a few years since the immigration reform and control act. maz that park of it works out. we are looking at a situation where millions of nationals are living in the united states, there were people that were told wouldn't feel

the need to come because things would be so much better in mexico. >> if you see the numbers, actually h flows from mexico from 2010 on are negative. we had more mexicans in 2007 than we do today. mention call born citizens. and the numbers at the southwest boardner the year 2003, 1.7 million people. in went 12, they apprehended 386,000 people. and i would say a large pore position of them in 2012 -- 2013 are nonmexicans. so in this sense, mexico is not going to be a major source of migrants to the u.s. into the future, because the mexican economy is performing much better, and of course, we are facing the change in a very dramatic way. so in this sense, migration from mexico to the u.s. has been chained

from the dynamics on it's own, and of course from the way the mexican economy transforms now. and nafta has a lot to do with with that, in terms of mod certain ocean of own economy, and now with this waive of reforms. we are positioning reusing barriers of entrance, and releasing transaction costs from small and mid i am side enterprises to profit from the domestic market, and from engaging themselves with these north american equation. it's a more even question? >> you always have lows. you have flows from canada, and this is a tun in that sense is very attractive for immigrants from all over the world, but mexico is not going

to be a major source of migrants. >> and one quick question, when i had talked to karla hills about where nafta has come short, she noted the fact that it didn't promise that mexican truck traffic could move easily, as canadian truck traffic does, we are 20 years into this treaty, what with is going on. >> it is very frustrating. we are moving forward but still not there. of course, we hope that we get those agreements that were really signed and agrees upon in full fours. >> will n nafta be less important, bawl all three will be looking west. >> no, i think the base of principles in the north american trade

agreement will become hopefully the base of the time agreement in the tpp agreement with our friends in the asia pacific region. so that is the key part of the why we are involved in the markets that are in great size for all countries. in the pacific region, there's always offense and defensive issues at any trade table, as you know, and all countries have both offensive positions and defensive positions with each other. those are contains within the spirit and the meaning of our agreement.

>> good to talk to you. >> thank you. >> that brings us to the end of this edition of inside story, thank you for being with us, in washington, i'm ray swarez. >> we're driving to a crime scene in a suburb outside of columbia, south carolina... we've come because more women are killed by men here than any other state in the country... around 10:30 in the morning, a family of four, including two children, weou