What Is NAFTA?

NAFTA is a comprehensive rules-based agreement among the United States, Canada, and Mexico that took effect January 1, 1994. It was passed by the U.S. Congress in November 1993. The Agreement eliminated many tariffs immediately while other tariffs will fall to zero over a 5 to 15 year period. NAFTA goes well beyond tariff reduction.

• It opened previously protected sectors in agriculture, energy, textiles, and automotive trade.
• It opened up the U.S.-Mexico border to trade in services with specific rules in finance, transportation, and telecommunications.
• It set rules on government procurement and intellectual property rights.
• It set specific safeguards, including how to deal with subsidies and unfair practices; it set up procedures for dealing with private commercial or agricultural disputes; and it set up a process for dealing with NAFTA implementation concerns.