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North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) was implemented in 1994. The agreement eased border restrictions and otherwise facilitated the movement of capital, goods, and services between Canada, the United States, and Mexico. NAFTA promoted cross-border investment by ensuring “nondiscriminatory treatment” and legal protections for foreign investors. For goods and services—from flat-screen televisions to corn to financial services—most tariffs and nontariff barriers to trade were eliminated or phased out. NAFTA did not, however, address the cross-border movement of people, as did the more far-reaching economic integration of the European Union. Two side agreements to NAFTA sought to address labor and environmental concerns that had emerged in debates about the controversial trade pact.

Proponents of NAFTA argued that economic liberalization would encourage competition and increase labor and ...

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