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The North American Free Trade Agreement (NAFTA)

General Information

As of January 1, 2008, all tariffs and quotas were eliminated on U.S. exports to Mexico and Canada under the North American Free Trade Agreement (NAFTA). NAFTA created the world’s largest free trade area, which links 454 million people producing over $17.2 trillion worth of goods and services in 2010. The dismantling of trade barriers and the opening of markets has led to economic growth and rising prosperity in all three countries.

Total merchandise trade among the United States, Canada, and Mexico reached $944.6 billion in 2010, an increase of 218% since 1993. Canada and Mexico are our first and third largest merchandise trading partners, accounting for 32.3 percent of U.S. exports to the world in 2010.

The NAFTA provides coverage to services with the exception of aviation transport, maritime, and basic telecommunications. The agreement also provides intellectual property rights protection in a variety of areas including patent, trademark, and copyrighted material. The government procurement provisions of the NAFTA apply not only to goods but to contracts for services and construction at the federal level. Additionally, U.S. investors are guaranteed equal treatment to domestic investors in Mexico and Canada. Overall investment from the United States to Canada and Mexico reached $628 billion in 2009, growing 75 percent since 2003.

By Sector

U.S. exports to its NAFTA partners totaled $411.5 billion in 2010 and increase of 23 percent over 2009. Principal U.S. exports to Mexico and Canada in 2010 included electrical machinery, machinery, vehicles, mineral fuel/oil, and plastics.

Additional Information