NAFTA is a treaty signed in 1992 between the United States, Canada, and Mexico to eliminate tariffs and taxes on products traded between the three countries. It aims to increase trade by removing trade barriers like tariffs. Under NAFTA, the US trades machinery, cars, chemicals, and farm equipment with Canada in exchange for oil, electricity, lumber, and car parts. With Mexico, the US trades machines and car parts for oil and minerals. NAFTA took effect on January 1, 1994 after being signed into law by President Clinton.