Has economic thought influenced international policy initiatives? The topic of trade and especially free trade is a well-established in economics through classical economists Adam Smith and David Ricardo. International free trade agreements are comprised of regional trade agreements (RTAs) and preferential trade agreements. According to the World Trade Organization (WTO), a regional trade agreement is "a reciprocal trade agreement between two or more partners and they include free trade agreements and customs unions (WTO). There are also preferential trade agreements which are defined as "unilateral trade preferences" (WTO). The North American Free Trade Agreement is a regional trade agreement between the United States, Mexico and Canada. Nearly twenty years after it was signed NAFTA remains a divisive topic. I will be exploring the influence of economic thought on NAFTA and my primary focus is whether or not it has been successful in its goals specifically in regard to trade. I will do so by analyzing competing views on this agreement and whether or not it has increased trade through Stephen W. Hartman, Isabel Studor and Carol Wise and Gary Clyde Hufbauer and Jeffrey J. Schott. .
The notion of trade especially free trade has been rooted in the history of economic thought through classical economics. Trade has been important from Mercantilism to Adam Smith's principle of Laissez Faire to David Ricardo's principle of comparative advantage. Scottish moral philosopher, Adam Smith discusses trade and barter in An Inquiry into the Nature and Causes of the Wealth of Nations. Smith advocated for Laissez Faire or "let it be" which is for there to be no government intervention in the market in terms of no tariffs and no encouraging of any exports or imports (Smith 99). NAFTA has been influenced by this through the establishment of free trade between the agreeing countries.