NAFTA - FROM CONGRESSIONAL PASSAGE TO IMPLEMENTATION WOES

This paper reviews the decision making process during the 1993 NAFTA d ebate and Congressional vote, and evaluates the likelihood that key pr ovisions on trucking will be implemented. We provide empirical evidenc e that a combination of expert knowledge and modeling allows analysts to accurately obtain insights and anticipate outcomes of political pro cesses. Utilizing the Expected Utility approach to analyze the NAFTA n egotiations prior to the Congressional vote in November 1993, we show that the outcome of this ''uncertain'' vote according to most expert a nd media until the very last days, was correctly forecasted months bef ore the actual vote. Furthermore, we show that the benefits of possess ing such political knowledge translate directly to the economic sphere . We then show that the same approach can be used to account for the f ailure to implement kev NAFTA provisions on trucking. and anticipate t heir likely resolution. Finally, we demonstrate that the information p rovided by the combination of expert knowledge and modeling is superio r to either of them separately, and cannot be matched by even a thorou gh contextual analysis of the situation.