NAFTA

NAFTA

NAFTA

Introduction

The North American Free Trade Agreement (NAFTA) is a three-country preferential trade agreement (PTA) in the form of an intergovernmental accord between Canada, Mexico, and the United States. Authorized in 1993 to commence in 1994, it was the first PTA to encompass one developing and two advanced economies. NAFTA built upon already substantial links between the three countries. Prior to NAFTA the United States was the major trading partner of both Canada and Mexico, and together these countries accounted for one-quarter of two-way U.S. merchandise trade.

Discussion

Each country had its own specific reasons for entering into NAFTA. For the United ...