The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian Mulroney, Mexican President Carlos Salinas and U.S. President George H.W. Bush, came into force on January 1, 1994. NAFTA has created economic growth and a rising standard of living for the people of the three member countries. By strengthening trade and investment rules and procedures across the continent, Nafta has proven to be a solid foundation for building Canada`s prosperity. NAFTA replaced Canada-U.S. Free Trade Agreement (CUFTA). Negotiations on CUFTA began in 1986 and the agreement entered into force on 1 January 1989. The two nations agreed on a landmark agreement that put Canada and the United States at the forefront of trade liberalization. For more information, visit the Canada-U.S. Free Trade Agreement information page.
Critics of NAFTA often focus on the U.S. trade balance with Mexico. While the United States enjoys a slight advantage in services trade by exporting $30.8 billion in 2015 while importing $21.6 billion, the trade balance with the country is generally negative, due to a yawning deficit of $58.8 billion in merchandise trade in 2016. This represents a surplus of $1.7 billion in 1993 (in 1993, the deficit was $36.1 billion). Although NAFTA did not report everything its supporters had promised, it remained in place. Indeed, in 2004, the Central American Free Trade Agreement (CAFTA) extended NAFTA to five Central American countries (El Salvador, Guatemala, Honduras, Costa Rica and Nicaragua). In the same year, the Dominican Republic joined the group in signing a free trade agreement with the United States, followed by Colombia in 2006, Peru in 2007 and Panama in 2011. The Trans-Pacific Partnership (TPP), signed on October 5, 2015, represented an extension of NAFTA to a much larger extent. The highly organized opposition to NAFTA has focused on the fear that the removal of trade barriers will encourage U.S. companies to get carried away and settle in Mexico to use cheap labour. This concern increased in the early years of the 2000s, when the economy experienced a recession and the subsequent recovery turned out to be a «recovery in unemployment». Opposition to NAFTA was also strong among environmental groups, who said that the anti-pollution elements in the treaty were woefully inadequate.
This criticism has not wavered since the implementation of NAFTA. In fact, Mexico and Canada have been cited on several occasions for environmental infidelities. Analysts agree that NAFTA has opened up new opportunities for small and medium-sized enterprises. Each year, Mexican consumers spend more on U.S. products than their counterparts in Japan and Europe, which means the stakes are high for entrepreneurs. (Most NAFTA studies focus on the impact of U.S. affairs with Mexico. Trade with Canada has also been improved, but the passage of the trade agreement has not had such a significant impact on the already liberal trade practices that America and its northern neighbour have complied with.) Some small businesses have been directly affected by NAFTA.
