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The North American Free Trade Agreement (NAFTA) calls for a gradual removal of tariffs and other trade barriers on most goods produced and sold in North America. NAFTA became effective in Canada, Mexico, and the United States on January 1, 1994. NAFTA forms the worlds second largest free trade zone, bringing together 365 million consumers in Canada, Mexico, and the United States in an open market.

NAFTA was built upon a 1989 trade agreement between the United States and Canada that eliminated or reduced many tariffs between the two countries. 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 15 years. Restrictions are to be removed from many categories, including motor vehicles and automotive parts, computers, textiles, and agriculture. The treaty also protected intellectual property rights such as patents, copyrights, and trademarks and outlined the removal of restrictions on investment among the three countries. Mandates for minimum wages, working conditions and environmental protection were added later as a result of supplemental agreements in 1993.

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