Publish date:
Year
1994
Month Day
January 01

The North American Free Trade Agreement comes into effect

On the first day of 1994, one of the largest and most significant trade pacts in world history comes into effect. The North American Free Trade Agreement between Canada, the United States and Mexico removed most of the trade barriers between the three countries, but it has been controversial in all three since its inception.

Ronald Reagan was the first U.S. president to propose a trilateral free trade agreement between the nations of North America. His successor, George H.W. Bush, opened negotiations with Mexican President Carlos Salinas de Gortari, which Canadian Prime Minister Brian Mulroney later joined. The goal was to do away with most tariffs and barriers to the movement of people and products across the three countries' borders. The debate over ratification of the treaty was heated in all three countries, with critics warning that it would have adverse affects on the ability of workers to organize and, as a result, depress wages. There were also environmental concerns, which were addressed by a side deal. All three nations ratified NAFTA in the end, and President Bill Clinton signed it into law on December 8, 1993. it took effect on New Year's Day 1994.

The most immediate of all effects of NAFTA was a guerilla uprising in the Mexican state of Chiapas. NAFTA had forced the Mexican government to remove an article from its constitution that protected communal indigenous lands from privatization, viewing it as an intolerable barrier to investment. Rather than assent to the potential selling-off of their lands, the mostly-indigenous Zapatista Army of National Liberation rose up and occupied roughly half of Chiapas overnight, just as the treaty came into effect. The standoff with the Mexican government and de facto rule of the rebels continues to this day.

Since 1994, NAFTA has greatly increased the volume of trade between the three countries. Other effects are disputed, although many credit it with boosting industry in Mexico and small businesses in the United States, while critics often argue that it has hurt Mexican farmers and cost America jobs. In 2016, both Republican presidential nominee Donald Trump and Democratic candidate Bernie Sanders, who voted against ratification, made their criticism of NAFTA a major part of their campaigns.

Once in office, Trump forced a re-negotiation of NAFTA. The new arrangement, the United States-Mexico-Canada Agreement, is somewhat more protectionist and kinder to American industries, most notably pharmaceutical companies, but more or less continues NAFTA's legacy of free trade. 

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