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The North American Free Trade Agreement, known usually as NAFTA, is a comprehensive trade agreement linking Canada, the United States, and Mexico in a free trade sphere. NAFTA went into effect on January 1, 1994.
 The NAFTA initialing ceremony in October 1992. NAFTA called for immediately eliminating duties on half of all U.S. goods shipped to Mexico and gradually phasing out other tariffs over a period of about 14 years. Restrictions were to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights (patents, copyrights, and trademarks) and outlined the removal of restrictions on investment among the three countries. Provisions regarding worker and environmental protection were added later as a result of supplemental agreements signed in 1993.
The agreement was an expansion of the earlier Canada-U.S. Free Trade Agreement of 1989. Unlike the European Union, NAFTA does not create a set of supranational governmental bodies, nor does it create a body of law which is superior to national law. NAFTA, as an international agreement, is very similar to a treaty (indeed, in Spanish, it is styled a tratado). Under United States law it is classed as a congressional-executive agreement.
The agreement was pursued by the Conservative governments in the US and Canada. In Canada, the Government was lead by Brian Mulroney of the Progressive Conservative Party of Canada. The Canadian government worked aggressively with Republican President Ronald Reagan to create and sign the agreement. There was considerable opposition on both sides of the border that persists to today. Recently in Canada, labour unions have removed their objections to the agreement from their platforms.
Effects
NAFTA has been controversial since it was first proposed. Transnational corporations have tended to support NAFTA in the belief that lower tariffs would increase their profits. Labor unions in Canada and the United States have opposed NAFTA for fear that jobs would move out of the country due to lower wage costs in Mexico. Farmers in Mexico have opposed NAFTA because the heavy agriculture subsidies for farmers in the United States have put a great deal of downward pressure on Mexican agricultural prices, forcing many out of business. Opposition to NAFTA also comes from environmental, social justice, and other advocacy organizations that believe NAFTA has detrimental non-economic impacts to health, environment, etc. In Mexico, NAFTA's approval was quickly followed by an uprising amongst indigenous people led by the Zapatistas, and tension between them and the Mexican government remains a major issue.
Since NAFTA was signed, it has been difficult to analyze its macroeconomic effects due to the large number of other variables in the global economy. Various economic studies have generally indicated that rather than creating an actual increased trade, NAFTA has caused trade diversion, in which the NAFTA members now import more from each other at the expense of other countries worldwide.
From the perspective of North American consumers, the most prominent effect of NAFTA has been the significant increase in bilingual or even trilingual labeling on products, for simultaneous distribution through retailers in Canada, the U.S., and Mexico.
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