The North American Free Trade Agreement

The North American Free Trade Agreement (NATFA), which was signed on August 12, 1992, links the economies of the United States, Canada, and Mexico, creating an $8 trillion, 380-million person market, the world's largest. This paper reviews the effects of NAFTA on the three economies involved, covers the basic terms of the agreement, and looks at the results (economic and political) of the pact. The particular emphasis of the paper is on Mexico. The economy of Canada is already closely linked with that of the United States due to cultural, economic and legal similarities. Mexico, however, represents a potential threat to American security interests. Exploding populations, illegal immigration, chronic poverty, political instability, and the possibility of civil unrest, make Mexico an uncertain friend south of the border. The paper concludes that only a prosperous Mexico is not a threat to U.S. national security, and NAFTA is the best available mechanism to bring that about.