The North American Free Trade Agreement (NAFTA) is an extensive trade agreement that sets the rules of trade and investment between Canada, the United States, and Mexico. It was implemented on January 1, 1994, and since then the agreement has eliminated most tariff and non-tariff barriers to free trade and investment between the three countries. It is the world’s largest free trade agreement as measured by Gross Domestic Product (GDP). The way that it works is that NAFTA is a formal agreement with clear rules for commercial activity between the three countries. It is overseen by several institutions that ensure the proper analysis and fulfillment of the agreement’s provisions.
