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North American Free Trade Agreement

The United States, Mexico, and Canada have reached an agreement to modernize the 25-year-old NAFTA into a 21st century, high-standard agreement. The new United States-Mexico-Canada Agreement (USMCA) will support mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America.

The Long Shadow of NAFTA

Neither side of the border has seen the benefits it was promised.
Feb 20, 2024 – The year 1994 marked the beginning of the era of globalization. For a short time after the end of the Cold War, it was unclear what would be the driving theme of the next period in history. Then it emerged: borderlessness. The theme of the new era would be the free movement of goods, people, and capital. In a few short months on either side of January 1, 1994, the European Union was formed; the Marrakesh agreement was signed, creating the World Trade Organization; the Channel Tunnel opened; and the North Atlantic Free Trade Agreement came into effect.

The North American Free Trade Agreement (NAFTA) is a comprehensive trade agreement that sets the rules of trade and investment between Canada, the United States, and Mexico. Since the agreement entered into force on January 1, 1994, NAFTA has systematically eliminated most tariff and non-tariff barriers to free trade and investment between the three NAFTA countries.

NAFTA is a formal agreement that establishes clear rules for commercial activity between Canada, the United States, and Mexico. NAFTA is overseen by a number of institutions that ensure the proper interpretation and smooth implementation of the Agreement’s provisions. For more information about NAFTA trilateral institutions, please see About NAFTA.

NAFTA countries

Canada: One in five jobs in Canada is in part linked to international trade, and Canada’s prosperity is built on its openness to international trade and investment. As such, the North American continental partnership is without a doubt an important competitive advantage for Canada. Canada is using this continental platform as a way to help Canadian business embrace commercial opportunities around the world.

The United States: The largest and most diversified economy in the world, the United States is a market economy whose businesses are world leaders in the manufacturing and high-tech sectors, especially computers, medical equipment, and aerospace, and in services, including financial services and telecommunications, and in agriculture.

Mexico: Trade liberalization has transformed and modernized Mexico’s vibrant economy by successfully boosting trade and investment flows. Within just a few years, Mexico’s exports have diversified from primarily oil to include an array of manufactured products, making Mexico one of the largest exporters in the world.

Since NAFTA came into effect, trade and investment levels in North America have increased, bringing strong economic growth, job creation, and better prices and selection in consumer goods. North American businesses, consumers, families, workers, and farmers have all benefited.

Facts & Figures

Canada and the United States implemented a free trade pact in 1989. In 1994, NAFTA broadened the free trade area to include Mexico.

NAFTA Economy: Today NAFTA covers a North American economy with a combined output of US$17.0 trillion.

NAFTA Population: The NAFTA region is home to 444.1 million people, 33.3 million of whom live in Canada, 304.1 million in the United States, and 106.7 million in Mexico.

NAFTA Languages: English, Spanish, and French are languages widely spoken in the NAFTA countries. However, many other languages are spoken across the continent.