NAFTA: From congressional passage to implementation woes

This paper reviews the decision making process during the 1993 NAFTA debate and Congressional vote, and evaluates the likelihood that key provisions on trucking will be implemented. We provide empirical evidence that a combination of expert knowledge and modeling allows analysts to accurately obtain insights and anticipate outcomes of political processes. Utilizing the Expected Utility approach to analyze the NAFTA negotiations prior to the Congressional vote in November 1993, we show that the outcome of this “uncertain” vote according to most expert and media until the very last days, was correctly forecasted months before the actual vote. Furthermore, we show that the benefits of possessing such political knowledge translate directly to the economic sphere. We then show that the same approach can be used to account for the failure to implement key NAFTA provisions on trucking, and anticipate their likely resolution. Finally, we demonstrate that the information provided by the combination of expert knowledge and modeling is superior to either of them separately, and cannot be matched by even a thorough contextual analysis of the situation.