The North American Free Trade Agreement (NAFTA) is signed into law by President Bill Clinton. Clinton said he hoped the agreement would encourage other nations to work toward a broader world-trade pact.
NAFTA, a trade pact between the United States, Canada, and Mexico, eliminated virtually all tariffs and trade restrictions between the three nations. The passage of NAFTA was one of Clinton's first major victories as the first Democratic president in 12 years--though the movement for free trade in North America had begun as a Republican initiative.
During its planning stages, NAFTA was heavily criticized by Reform Party presidential candidate Ross Perot, who argued that if NAFTA was passed, Americans would hear a "giant sucking sound" of American companies fleeing the United States for Mexico, where employees would work for less pay and without benefits. The pact, which took effect on January 1, 1994, created the world's largest free-trade zone.