GlossaryEN1 min readUpdated: Jun 26, 2026

NAFTA - North American Free Trade Agreement

NAFTA, the North American Free Trade Agreement, was the trilateral trade accord between Canada, Mexico, and the United States, which entered into force on 1 January 1994.

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Last updated: 26 June 2026Published: 22 November 2025

Source: https://ustr.gov/trade-agreements/free-trade-agreements/united-states-mexico-canada-agreement

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Definition & Explanation

NAFTA, the North American Free Trade Agreement, was the trilateral trade accord between Canada, Mexico, and the United States, which entered into force on 1 January 1994. Over a phased 15-year transition, it eliminated tariffs and reduced non-tariff barriers across the three economies, covering goods, services, investment, and intellectual property rights. Rules of origin were the most operationally significant element for customs brokers and freight forwarders: goods had to achieve a defined regional value content to qualify for preferential duty rates. NAFTA was replaced on 1 July 2020 by the USMCA (United States–Mexico–Canada Agreement), which modernised provisions on digital trade, labour standards, and automotive sector content rules. The name NAFTA remains relevant for interpreting legacy contracts, historical customs records, and arbitration decisions that continue to reference the original agreement.