NAFTA (North American Free Trade Agreement) Countries 2025

The North American Free Trade Agreement, or NAFTA, is an agreement that was signed on January 1, 1994. Under this agreement, three nations have removed trade barriers and eliminated tariffs. The three nations that have signed this treaty are the United States, Mexico, and Canada. With a combined domestic product of $20 trillion, this is the largest free trade agreement in the world.

In recent years, the benefits and drawbacks of this trade agreement have come to light. This agreement keeps grocery prices lower in the United States because of its tariff-free imports from Mexico. Imported oil also keeps gas prices in the U.S. down. Trade and economic growth have also increased as a result of the treaty.

On the downside, many manufacturing jobs from the U.S. were sent to Mexico. American workers that kept these industry jobs faced reduced wages, while many workers in Mexico have been exploited.

In September 2018, NAFTA has been renegotiated. This new treaty – known as the United States-Mexico-Canada Agreement – still needs to be ratified for by every nation and will not go into effect for several more years.

Under NAFTA, tariffs on imports and exports have been eliminated for products that are made in one of the three nations. NAFTA also grants most-favored-nation status, which means that all parties must receive equal treatment, including in foreign direct investment. NAFTA also outlines the procedures required to resolve trade disputes. The agreement also allows for easy access for business travelers traveling throughout the three nations.