Economics and Business


What is NAFTA?

NAFTA is the North American Free Trade Agreement, signed on December 17, 1992, by U.S. president George H. W. Bush (1924–), Canadian prime minister Brian Mul-roney (1939–), and Mexican president Carlos Salinas de Gortari (1948-). It went into effect January 1, 1994. Inspired by the success of the European Community’s open-trade agreement, the architects of NAFTA aimed to create free trade among North America’s three largest countries. A 1988 pact between the United States and Canada had already lifted numerous barriers to trade between the two nations; that agreement was expanded to include Mexico through a series of negotiations that were preliminarily approved in August 1992 and were concluded with the signing of NAFTA later that year. The agreement removes trade barriers, including customs duties and tariffs, over the course of 15 years, allowing commodities and manufactured goods to be freely traded among the three nations. NAFTA also includes provisions that allow American and Canadian service companies to expand their markets into Mexico.


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