Foreign Investments, Trade, and Sustainability in Sub-Saharan Africa and North America Under the West African Economic and Monetary Union and The United States-Mexico-Canada Free Trade Agreements [Article]

Abstract

Many scholars have commented on free trade, foreign investment, and sustainable development. The three concepts are intertwined and underlie global trade and economic and legal discussions on countries' development. The multilateral trade system gave leeway to countries for regional integration under Regional Trade Agreements (“RTAs”), shaped as customs unions or Free Trade Areas. These agreements aim to maximize free trade within specific regions. Facilitating free trade brings more benefits in different ways and is a strong incentive for foreign investments. Foreign investments generate jobs and wealth and are fuel for development. However, free trade has downsides. Corporations are in the “race to the bottom” to take advantage of lax environmental, human, and worker rights regulations to increase their benefits and profit. Here comes sustainability to mitigate free trade's adverse effects on vulnerable countries and, more broadly, humanity. This study will comprehensively analyze the West African Economic and Monetary Union (WAEMU) and the United States, Mexico, and Canada (USMCA), two major Regional Trade Agreements. The WAEMU treaty was signed in 1997 and amended once in 2003, while the USMCA, building upon the North American Free Trade Agreement (NAFTA), entered into effect in 2020. The purpose of this study is to make a comparative analysis to, in fine, show the WAEMU treaty's shortcomings regarding free trade, foreign investment policies, and sustainability, and how the USMCA, a more recent and innovative free trade agreement, can fill its gaps. Thus, this comprehensive and comparative analysis will have three parts. As a background and to set the scene, we will explain (I) the global logic of free trade agreements, with the World Trade Organization (WTO) representing the multilateral trade system and Regional Trade Agreements (RTA) in global trade. Then, (II) the USMCA and the WAEMU treaties will be sketched out individually before (III) our final comparative analysis and assessment of both treaties regarding free trade, foreign investments, and sustainability, followed by critiques, recommendations, and suggestions for improvements.