North American Free Trade Agreement (NAFTA)

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The North American Free Trade Agreement (NAFTA) was a landmark trade pact signed in 1992 by Canada, Mexico, and the United States. It came into effect on January 1, 1994, creating a free-trade zone among these countries. NAFTA aimed to reduce or eliminate tariffs and other trade barriers, facilitating the movement of goods and services across borders. The agreement built upon the U.S.-Canada Free Trade Agreement of 1988, extending its provisions to include Mexico. Key sectors like agriculture, automotive, and textiles saw significant tariff reductions. NAFTA also included provisions for intellectual property protection and dispute resolution mechanisms. Side agreements focused on labor rights and environmental protection were added to address concerns about exploitation and environmental degradation. Despite its goals, NAFTA was controversial, with critics arguing it led to job losses in the U.S. and environmental issues in Mexico. It was eventually replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020. NAFTA played a significant role in shaping North American trade dynamics before its replacement.