The United States, Canada and Mexico are three countries that make up NAFTA. The acronym NAFTA stands for North American Trade Association. NAFTA is a trilateral free trade agreement between the three countries, meant to promote regional cooperation. It was enacted officially in 1994.
NAFTA opened up the doors for importing and exporting of goods and services between the North American countries, while eliminating the tariffs and quantitative restrictions. The signing of NAFTA promised to create good paying jobs. The Canamex Corridor transportation infrastructure was created between Canada and Mexico as a direct result of the agreement.
Machinery, agricultural products and vehicles are among some of the products exported from the United States. Mineral oil and crude oil are the top items that are imported into the United States from the other two NAFTA countries.
NAFTA was enacted between these three countries due to their common borders and their standing and potential as the economic leaders of the region. Before the agreement was signed, Canada and the United States had similar economic systems with high growth rates and few barriers to trade. In 1988, Canada and the United States signed a free trade agreement that Mexico later joined to become the agreement currently in place. The agreement is overseen by the Federal Trade Commission and its primary administrator, the Secretariat.
NAFTA led to an increased level of economic cooperation in the region, including border security cooperation as well as a significant level of economic growth in Mexico, according to International Democracy Watch. Not all of the effects of the policy have been positive, as NAFTA has been credited with the movement of a large number of manufacturing jobs from the United States to Mexico.
The United States Trade Representative claims that NAFTA has directly resulted in the growth of U.S. businesses through trade with NAFTA partners, as well as growth in manufacturing exports and a trade surplus with NAFTA countries.