NAFTA ain't got jack to do with it. American car manufacturers allowed themselves to get a reputation for unreliability, inefficiency, and high prices. Whether or not it was deserved, they did little to combat it until it was too late. Granted, most GM and MOPAR cars now are as good as their foreign counterparts, or better, and have been for the better part of the past decade, but they still suffer from that reputation they got in the eighties.
North American automakers really do need to expand into foreign markets if they're going to survive, and if they are constrained by a lack of trade agreements with the country/state/province they produce their vehicles in, then they HAVE to take their jobs elsewhere.
I'm not saying that they should just take off in the middle of the night, but if they are going to stay, the government needs to seriously address any policies that might stand in the way of doing profitable business.