When did NAFTA take effect?

NAFTA, the North American Free Trade Agreement, took effect on January 1, 1994. It had been signed on December 17, 1992 by Prime Minister Brian Mulroney, US President George H.W. Bush, and Mexican President Carlos Salinas in ceremonies at Mexico City, San Antonio, and Ottawa. NAFTA created a trilateral free-trade area among Canada, the United States, and Mexico, expanding the existing Canada-US Free Trade Agreement of 1989 to include Mexico. NAFTA was the world's largest free-trade area by GDP at its creation. It was replaced by the Canada-United States-Mexico Agreement (CUSMA, called USMCA in the United States and T-MEC in Mexico) on July 1, 2020.

NAFTA's negotiation began in 1990 under Bush and Mulroney. The Salinas government in Mexico, pursuing economic liberalisation, had requested entry to the FTA framework. The trilateral negotiations concluded in August 1992. The signing ceremony took place on December 17, 1992, with each leader signing at his respective capital. US ratification (under newly elected President Bill Clinton) included two side agreements on labour and environmental standards, signed September 14, 1993. Canadian ratification passed under the new Chrétien Liberal government, which had been elected on October 25, 1993. Chrétien had campaigned on renegotiating NAFTA but ultimately accepted it with the side agreements.

NAFTA's main provisions eliminated tariffs on most goods over phased schedules (most tariffs gone by 2008, with sensitive agricultural products taking longer). It established national treatment for services, investment, and intellectual property. It extended the FTA's Chapter 19 binational dispute panels to all three countries. NAFTA Chapter 11 created an investor-state dispute settlement (ISDS) mechanism allowing private investors to sue host governments for violations of NAFTA investment rules. The ISDS mechanism became controversial over subsequent decades, with Canada being the most frequent defendant under the agreement.

NAFTA's economic effects on Canada included continued growth in trade with the United States and Mexico, with combined exports rising from about 145 billion dollars in 1994 to about 525 billion dollars by 2018. Canadian auto, energy, agriculture, and forestry sectors particularly benefited. Critics argued NAFTA contributed to Canadian manufacturing decline and labour-rights erosion. The Trump administration in the United States demanded NAFTA renegotiation in 2017; the resulting Canada-US-Mexico Agreement (CUSMA) was signed November 30, 2018 (revised December 10, 2019) and took effect July 1, 2020. CUSMA preserves much of NAFTA's structure but adds new provisions for digital trade, labour standards, and rules of origin (particularly for automobiles).