Summary of Multilateral Agreements Between Canada, Mexico and the

United States

The North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian
Mulroney, Mexican President Carlos Salinas, and U.S. President George H.W. Bush, came into
effect on January 1, 1994. NAFTA has generated economic growth and rising standards of living
for the people of all three member countries. By strengthening the rules and procedures
governing trade and investment throughout the continent, NAFTA has proved to be a solid
foundation for building Canada’s prosperity.

The NAFTA superseded the Canada-U.S. Free Trade Agreements (CUFTA). Negotiations
towards the CUFTA began in 1986 and the agreement was in force by January 1, 1989. The two
nations agreed to a historic agreement that placed Canada and the United States at the forefront
of trade liberalization. For more information, please see the information page on the Canada-US
Free Trade Agreement.

North American Agreement on Labour Cooperation

The North American Agreement on Labour Cooperation (NAALC) came into effect in January
1994. It is one of two parallel accords to the North American Free Trade Agreement between the
United States, Canada, and Mexico. The Agreement is administered by the Commission for
Labour Cooperation, which consists of a Council of Ministers and a tri-national Secretariat,
based in Washington D.C. Currently four provinces (Quebec, Alberta, Manitoba and Prince
Edwards Island) are signatories to the NAALC through an Intergovernmental Agreement.

The Commission works in close cooperation with the National Administrative Offices (NAOs)
established in each country to implement the Agreement and serve as the national point of
contact. In Canada, the Office for Inter-American Labour Cooperation within the Labour Branch
of Human Resources and Skills Development Canada acts as the Canadian NAO. The
Canadian NAO also provides for the submission and receipt of public communications
(complaints) on labour law matters arising in the territory of another Party and serves as the
official review agency in Canada.

The text of the North American Agreement on Labour Co-operation is available on The
Commission for Labour Cooperation’s website.

North American Agreement on Environmental Cooperation

The second parallel accord is the North American Agreement on Environmental Cooperation
(NAAEC), which established the Commission on Environmental Cooperation (CEC) in 1994.
The CEC is mandated to enhance regional environmental cooperation, reduce potential trade and
environmental conflicts and promote the effective enforcement of environmental law. It also
facilitates cooperation and public participation in efforts to foster conservation, protection and
enhancement of the North American environment. It consists of three principal components: the
Council (Environment Ministers), the Joint Public Advisory Committee (JPAC) and Secretariat,
headquartered in Montreal. It has an annual budget of US$9 million, with Canada, Mexico and
U.S. contributing US$3 million per year, and is governed by consensus (not majority).

History
 The North American Free Trade Agreement (NAFTA), signed by Prime Minister Brian
Mulroney, Mexican President Carlos Salinas, and U.S. President George H.W. Bush,
came into effect on January 1, 1994.
 The NAFTA was built on the success of the Canada-U.S. Free Trade Agreement and
provided a complement to Canada’s efforts through the WTO agreements by making
deeper commitments in some key areas.
 With the coming into force of the NAFTA, the world's largest free trade area was formed.
The Agreement has brought economic growth and rising standards of living for people in
all three countries.
 The NAFTA, being the first comprehensive trade agreement of its type, has set a valuable
example of the benefits of trade liberalization for the rest of the world.
 In the event of a dispute, the NAFTA directs the governments concerned to seek to
resolve their differences amicably through the NAFTA’s Committees and Working
Groups or other consultations. If no mutually acceptable solution is found, the NAFTA
provides for dispute settlement procedures. One of the principle elements of the NAFTA
is the establishment of a clear set of rules for dealing with the settlement of disputes. The
NAFTA was the first agreement to afford cross-border investors an impartial legal
tribunal to address differences.
 Under the NAFTA, tariffs on all covered goods traded between Canada and Mexico were
eliminated in 2008. Tariffs on covered goods traded between Canada and the United
States became duty free on January 1, 1989, in accordance with the CUSFTA which was
carried forward under NAFTA.

Prosperity
 Since 1994, NAFTA has generated economic growth and rising standards of living for
the people of all three member countries. By strengthening the rules and procedures
governing trade and investment throughout the continent, NAFTA has proven to be a
solid foundation for building Canada’s future prosperity.
 NAFTA has had an overwhelmingly positive effect on the Canadian economy. It has
opened up new export opportunities, acted as a stimulus to build internationally
competitive businesses, and helped attract significant foreign investment.
 By any measure the NAFTA has been a success by serving as a basis to grow both
trilateral and bilateral North American relationships and the results speak for themselves.
 This integration helps maximize our capabilities and make our economies more
innovative and competitive.
 In 2015, total trilateral merchandise trade, as measured by the total of each country’s
imports from its other two NAFTA partners, amounted to over USD $1.0 trillion – more
than a threefold increase since 1993. In 2015, NAFTA partners represented 28% of the
world’s gross domestic product (GDP) with less than 7% of the world’s population. Since
the implementation of NAFTA, the North American economy has expanded, with the
combined GDP for Canada, the U.S. and Mexico reaching USD $20.7 trillion in 2015.
 Cooperation through the NAFTA has created a North America where Canadian,
American and Mexican companies do more than make and sell things to each other, now,
our companies increasingly make things together.

Investment
 The NAFTA’s provisions ensure greater certainty and stability for investment decisions
by guaranteeing fair, transparent and non–discriminatory treatment of investors and their
investments throughout the free trade area.
 The NAFTA has contributed to enhancing Canada’s attractiveness to foreign investors
while providing more opportunities for Canadians to invest in NAFTA partners’
economies. Investment is a key pillar of economic growth. At the end of 2015, the stock
of investment in Canada from U.S. was CA$387.7 billion, while Canada has invested
CA$463.3 billion in our NAFTA partners.
 Canada and the U.S. have one of the world’s largest investment relationships with a
bilateral investment stock totalling almost CA$836.2 billion in 2015, according to
Canadian statistics.
 The stock of Canadian direct investment in Mexico has increased dramatically since
NAFTA entered into force, reaching CA$14.8 billion in 2015, up from only $530 million
in 1993.