Key elements of the agreement included the removal of tariffs, the removal of many non-tariff barriers, and it was one of the first trade agreements to deal with trade in services. It also included a dispute resolution mechanism for a fair and timely resolution of trade disputes. Beginning in 1855, when Canada was under British control, free trade between the North British And U.S. colonies was established as part of the reciprocity agreement. In 1866, a year before Canadian Confederation, the United States Congress voted to repeal the treaty. Canada`s first prime minister, John A. Macdonald, tried and failed to reintroduce reciprocity, after which the government moved to a more protectionist policy. Many politicians were increasingly concerned that closer economic relations with the United States would lead to political annexation. [4] President Bill Clinton signed it on December 8, 1993. According to a 2013 Jeff Faux article published by the Economic Policy Institute, California, Texas, Michigan and other high-concentration manufacturing states were most affected by NAFTA job losses. [97] According to a 2011 article by EPI economist Robert Scott, the trade agreement has « lost or supplanted » some 682,900 U.S. jobs.

[98] Recent studies have agreed with congressional Research Service reports that NAFTA has little influence on manufacturing employment and automation, accounting for 87% of manufacturing job losses. [99] Following the signing of the auto pact, the Canadian government considered proposing free trade agreements in other economic sectors. However, the U.S. government was less sensitive to this idea and wanted to remove some of the guarantees from the pact. Canada`s attention has focused on the issue of a broader free trade agreement between the two countries. [8] According to the Council on Foreign Relations, « the agreement was also intended to protect intellectual property, establish dispute resolution mechanisms, and implement measures to protect labour and the environment through ancillary restrictions. » On August 27, 2018, Mr. Trump and Mexico agreed on a bilateral trade agreement to replace NAFTA and threatened to ignore Canada. Canada joined on September 30, 2018. On November 30, 2018, the three countries reached an agreement. The new agreement is called the agreement between the United States, Mexico-Canada and has been ratified by the legislative branch of each country.

Mexico ratified it on June 19, 2019. The United States ratified the agreement on January 29, 2020. The Canadian Parliament ratified the USMCA on March 13, 2020. The agreement has failed to liberalize trade in some areas, particularly the ongoing dispute over coniferous timber. Issues such as trade in minerals, freshwater and conifer wood remain controversial. In its May 24, 2017 report, the Congressional Research Service (CRS) wrote that the economic impact of NAFTA on the U.S. economy was modest. In a 2015 report, the Congressional Research Service summarized several studies as follows: « In reality, NAFTA did not cause the huge job losses that critics feared, nor the significant economic benefits predicted by supporters. The overall net effect of NAFTA on the U.S. economy appears to have been relatively small, not least because trade with Canada and Mexico accounts for a small percentage of U.S. GDP.

However, there have been adjustment costs for workers and businesses as the three countries have prepared for more open trade and investment between their economies. [93]:2 In June 1990, Mexican President Carlos Salinas de Gortari called for a free trade agreement with the United States. In September 1990, Reagan`s successor, President George H.W. Bush, began negotiations with President Salinas for a liberalized trade agreement between Mexico, Canada and the United States. After diplomatic negotiations in 1990, the heads of state and government of the three nations signed the agreement on 17 December 1992