NAFTA began with Mexico's pitch and Canada's fear of being left out
After Canada and the United States signed a free trade deal in 1988, Mexico's president Carlos Salinas de Gortari proposed a similar pact to attract investment following Latin America's debt crisis. Canada, worried that a separate US-Mexico deal would erode its own gains, asked to join. The three-way result, NAFTA, took effect on January 1, 1994.
The idea was older. Ronald Reagan had floated a North American free trade zone when he announced his presidential run in November 1979. Talks among George H. W. Bush, Salinas and Canada's Brian Mulroney began around 1990, and the three leaders signed the agreement in their own capitals on December 17, 1992. Ratification was another matter, with strong opposition in both the United States and Canada.
In Washington, Bush ran out of time and passed the task to Bill Clinton, who added two side agreements on labour and environmental cooperation to reassure wavering members of Congress. The House approved the deal on November 17, 1993, by 234 to 200, with more Republicans than Democrats in favour, and the Senate followed 61 to 38. Clinton signed it on December 8, declaring that it meant good-paying American jobs. Mexico's Senate had approved it on November 22. In Canada the earlier deal had been a central fight in the 1988 election, which the pro-trade Conservatives won on a split opposition vote.
On day one, tariffs vanished on more than half of Mexico's exports to the United States and over a third of American exports going south, with nearly all remaining US-Mexico tariffs scheduled to go within ten years and some farm products within fifteen. Most US-Canada trade was already duty-free. The pact also tackled non-tariff barriers, protected intellectual property and created a procedure for settling disputes.
Its effects on jobs, the environment and growth stayed politically contested. Most economic studies found gains for the three economies and the average citizen, while a minority of workers in trade-exposed industries lost out, and economists warned that reimposing barriers would hurt all three countries, Mexico most of all. In 2018 the countries agreed on a replacement, the United States-Mexico-Canada Agreement, which took effect on July 1, 2020.
Source: North American Free Trade Agreement
