The North American Free Trade Agreement (NAFTA) is a three-country accord negotiated by the governments of Canada, Mexico, and the United States that entered into force in January 1994. NAFTA’s terms, which were implemented gradually through January 2008, provided for the elimination of most tariffs on products traded among the three countries.
Liberalization of trade in agriculture, textiles, and automobile manufacturing was a major focus.
The deal also sought to protect intellectual property, establish dispute-resolution mechanisms, and, through side agreements, implement labor and environmental safeguards. The goal of NAFTA was to eliminate barriers to trade and investment between the U.S.,
Canada and Mexico. The implementation of
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export markets in 2015. Imports from Canada ($295.2 billion) and Mexico
($294.7 billion) increased from $151 billion in 1993 to $590 billion. That's 26 percent of total
U.S. goods imports.
NAFTA boosted trade by eliminating all tariffs between the three countries. It also created agreements on international rights for business investors. That reduced the cost of commerce. It also spurs investment and growth, especially for small businesses. Lower tariffs also reduced import prices. That also lessened the risk of inflation and allowed the Fed to keep interest rates low. In addition, the trade lowered prices. Mexican oil is imported for less than before the agreement. That reduces U.S. gas costs. It also decreases reliance on oil from the Middle
East. Lower gas prices mean food can be transported more cheaply, reducing grocery bills. Farm products also reap the benefits of NAFTA's lower tariffs. That's especially important for oil prices since America's largest import is oil.
NAFTA boosted U.S. economic growth by as much as 0.5 percent a year. The sectors that benefited the most were agriculture, automobiles, and services. U.S. farm exports to Canada and Mexico grew 156 percent. That's compared to a 65 percent increase in farm exports to