6.1-NAFTA OverviewNAFTA Overview
The North American Free Trade Agreement (NAFTA), which was enacted in 1994 and created a free trade zone for Mexico, Canada, and the United States, is the most important feature in the U.S.-Mexico bilateral commercial relationship. 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). Mexico is the United States’ third largest trading partner and second largest export market for U.S. products. U.S-Mexico bilateral trade in goods increased from $88 billion in 1993, the year prior to the implementation of NAFTA, to $535 billion in 2014, an increase of 508 percent, or 9.8 percent per year.
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.
NAFTA allows your company to ship most goods to customers in Canada and Mexico duty free as long as they are comprised mostly of U.S. components. This video covers the key parts of the agreement and introduces the process for obtaining the benefits.
North American Free Trade Agreement NAFTA