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pohnpei397 eNotes educator| Certified Educator

“The NAFTA” is the North American Free Trade Agreement.  This was an agreement between Canada, the United States, and Mexico that came into effect on January 1, 1994.  As its name implies, NAFTA is an agreement between these three countries to try to create free trade among themselves.

What NAFTA does is it creates free trade between the three countries of the continent of North America.  It does this by removing trade barriers between the countries.  Trade barriers are things like tariffs and quotas that restrict how much trade can be conducted between the various countries.  Trade barriers can also take the form of unnecessary regulations (like some health and safety regulations) that are meant to reduce trade, not to actually protect health and safety.  NAFTA works by reducing all of these barriers to trade, thus resulting in free trade between the countries.  Proponents of NAFTA say that this has resulted in economic benefits for all three countries involved.