The North-American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States has been in force since January 1994. When NAFTA negotiations were concluded in 1992, it was the most comprehensive free trade agreement ever negotiated, creating the world’s largest market for goods and services.
The agreement eliminated almost all tariffs between the three countries and incorporated numerous other innovative provisions. NAFTA influenced other free trade agreements that the United States later negotiated and multilateral negotiations. It also initiated a new generation of trade agreements in the Western Hemisphere and other parts of the world, influencing negotiations in areas such as market access, rules of origin, intellectual property rights, foreign investment, dispute resolution, worker rights, and environmental protection.
NAFTA fundamentally reshaped North American economic relations, driving unprecedented integration between Canada, the United States and Mexico and encouraging a dramatic increase in regional trade and cross-border investment between the three countries. Since the agreement came into effect, trade between the three NAFTA parties has increased from US$ 290 billion in 1993 to over US$ 1.1 trillion in 2017.
To read the original piece, click here.
Copyright © 2019 International Monetary Fund. All rights reserved.