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Definition: NAFTA

NAFTA is the acronym for North American Free Trade agreement, which came into existence in 1994. This trade alliance created one of the largest free trade zones in the world and also propelled cordial trading between Canada, the US and Mexico.

North American Agreement on Environmental Cooperation (NAAEC) and North American Agreement on Labor Cooperation are the two supplements of NAFTA


The US- Canada trade agreement faced many controversies and was criticized. Hence, more ratification in the existing trade accord was required. Finally, the House of Representatives passed the NAFTA in Nov 1993.

Salient features of NAFTA are as follows:

• The largest export markets for US are Canada and Mexico. Hence, this trade helped in regulating this trade.

• Since inception, US exports to NAFTA have increased 258% and it helps the US maintain a manufacturing surplus.

• NAFTA and Trans Pacific Partnership go hand in hand. This will help the US address environmental challenges like wildlife trafficking and illegal fishing.

• NAFTA imports have increased competitiveness of American businesses.

Hence, this concludes the definition of NAFTA along with its overview.

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