This document provides a timeline and overview of the North American Free Trade Agreement (NAFTA). It discusses how the idea for NAFTA was originally proposed in the 1980s and negotiations began between the US, Canada and Mexico. Key events included the signing of CUSFTA in 1988, negotiations throughout the early 1990s, and the final signing of NAFTA in 1992. NAFTA took effect in 1994 and created the world's largest free trade zone between the three countries. The document outlines the objectives of NAFTA, as well as debates around both the pros and cons of the agreement.

2. Table of Content
1. Introduction
2. Brief History (Timeline)
• The Proposal
• Financial crisis in Mexico
• Change in Ministry in Canada
• Mexican government seeking alternative
• CUSFTA signing and putting it into effect
• Negotiation between Mexico and USA
• Canada request for Trilateral agreement
• Signing NAFTA
• NAFTA into effect
3. Objectives of Trade Agreement
4. Pros of the Trade Agreement
5. Cons of the Trade Agreement
6. Conclusion
7. Bibliography

3. 1. Introduction
• NAFTA (North American Free Trade Agreement) is an agreement singed between Canada, Mexico and United States.
• The free trade area between the United States, Canada, and Mexico is the largest in the world, with a gross domestic
product of 20 billion dollars; it is estimated that its economic output is even greater than all the countries that make
up the European Union.
• It came into effect on January 1, 1994.
• The main purpose of this agreement is to eliminate all trade and investment
barriers between the three countries.

4. 2. Brief History
• The idea of making North American free trade area
was raised by U.S. President Ronald Reagan in 1979.
Both Canada’s Prime Minister Pierre Trudeau and
Mexican President Jose Lopez Portillo were worried
regarding the U.S. dominance to the market and
showed no interest in such a deal.
• Meanwhile, in 1981-82, Mexico experienced a
huge debt crisis. During this period the country’s
foreign debt exceeded their ability to pay. And
leaders from Mexico’s dominant party, the
Institutional Revolutionary Party(PRI), began to
seek alternatives to the country’s nationalist
economic model.
USA – Canada
1979
1982
Timeline
Mexico
The proposal
Financial debt

5. 2. Brief History
• In 1984, with a change in government in Canada with
the election of Progressive Conservative prime minister
Brian Mulroney, led to negotiation of CUSFTA. There
was strong opposition to CUSFTA within liberal and
democratic parties in Canada. However, there was
less opposition from the labour group for this trade
agreement in U.S.
• With pressure from the International Monetary
Fund and World Bank, Mexican government
began to open up their economy, and joined
the GATT(General Agreement on Tariffs and Trade
in 1986, which was originally signed in 1947.
• However, international investors still doubted the
stability of Mexican market.
USA – Canada
1984
1986
Mexico
Change in Ministry
Seeking Alternative

6. • Canada-US free trade agreement(CUSFTA) came into effect on January 1, 1989.
18th Canadian Prime Minister
Martin Brian Mulroney
September 17, 1984 – June 25, 1993
40th U.S. President
Ronald Wilson Reagan
January 20, 1981 – January 20, 1989
Signed CUSFTA
in 1988.
1988
1989

7. 41st U.S. President
George H.W. Bush
January 20, 1989 – January 20, 1993
Former Mexican President
Carlos Salinas de Gortari
December 1, 1988 – November 30, 1994
Negotiated for a liberalized
trade agreement between
Mexico and United States.
• Before, NAFTA, Mexican tariffs on U.S. imports were almost 250% higher than U.S. tariffs on Mexican imports.
• The Canadian government were hesitant to share their preferential access to the huge U.S market with Mexico.
They also had little interest in Mexican market. However, Mulroney government decided that it would be better
to be a part of the negotiation than face a deal between U.S and Mexico that might divert trade and investment
from Canada.
1990

8. • In 1991, Canada requested for making a trilateral agreement between USA, Canada and Mexico.
1991

9. • In 1992, NAFTA was signed by President George H.W. Bush, Mexican president Salinas and Canadian
Prime Minister Brian Mulroney.
1992
From left to right: Mexican president Carlos Salinas, US president George H.W. Bush
and Canadian prime minister Brian Mulroney participate in the initialing ceremony
of NAFTA in San Antonio, Texas, 7 October 1992

10. • Before NAFTA came into effect, it was ratified by the legislature of all the three countries.
• Out of 230, 200 members of U.S. House of Representatives agreed for NAFTA. And 38 of 60 U.S. Senate members
approved for it on November 20.
President Bill Clinton signed NAFTA
on 8th December, 1993.
NAFTA came into
effect on
January 1, 1994.
1993
1994

11. 3. Purpose or objectives of trade agreement
• To remove trade and investment barrier between three nations.
• To facilitate cross-border movements of goods and services.
• To promote fair competitions.
• To increase investment opportunities.
• To protect intellectual property rights.
• To create procedures for the resolution of trade disputes.
• To establish an effective framework.
(Government of canada, 2016)

12. 4. Pros of the trade agreement
• Increase in trade revenue.
• Reduction in tariffs and import prices.
• Decrease in prices of food.
• Economic growth in various sectors.
• Increase in exports of agricultural products.
• NAFTA strengthened the automotive industry.
• Created millions of jobs.
• Increase in foreign direct investment.
• NAFTA protects intellectual properties.
(Amadeo, 2018)

13. 5. Cons of the trade agreement
• Loss of jobs in USA and Canada.
• Wages were suppressed in U.S.
• Low job security in U.S. & exclusion of worker’s rights
• Mexico's farmers were put out of business .
• Environmental hazard.
• Maquiladora workers were exploited.
• NAFTA called for free U.S. Access for Mexican trucks.
• Losses in weaker Canadian industries (wine & textiles).
(Amadeo, NAFTA's 6 negative effect, 2018)

14. 6. Conclusion
• NAFTA became foundations for strong economic growth, rising prosperity and strong trade relations
• But many critics sees NAFTA as an experiment done by influential multinational companies seeking to increase
profit at the expenses of the ordinary citizens.
• Trade relations expanded rapidly, but political co-operation remained weak.
• NAFTA continues to be a topic of controversy, as U.S. president, Donald Trump has threatened to renegotiate
or cancel the deal.
• The North American Free Trade Agreement created the world's largest free trade area. It links 450 million people.
Its member economies generates $20.8 trillion in gross domestic product.

15. Bibliography
• Amadeo, K. (2018, February 18). The balance. Retrieved April 03, 2018, from https://www.thebalance.com/advantages-of-nafta-3306271
• Amadeo, K. (2018, February 18). The balance. Retrieved April 03, 2018, from https://www.thebalance.com/advantages-of-nafta-3306271
• Government of canada. (2016, november 30). North American Free Trade Agreement. Retrieved from Government of canada website:
http://www.international/gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/nafta-alena/fta-ale/01.aspx?lang=eng.