trade in services. It also included a dispute settlement mechanism for the fair and expeditious resolution of trade disputes. Since then this Agreement has been superseded by the North American Trade Agree- ment (NAFTA), which came into effect on January 1, 1994. NAFTA created the largest free trade region in the world. The combined gross domestic product (GDP) for Canada, the U.S., and Mexico was US$19.2 trillion in 2012 up from US$7.7 tril- lion in 1993. Canadian merchandise exports to the United States grew at an annualized rate of 4.4 percent be- tween 1993 and 2012; and Canada’s bilateral merchandise trade with Mexico was close to $31 billion in 2012. Approximately 75.7 percent of Canada’s total merchandise ex- ports were destined to our NAFTA partners in 2012. Total merchandise trade between Canada and the United States more than doubled between 1993 and 2012. Trade between Canada and Mexico has increased more than almost 7-fold over the same period.
Tariffs One of the primary advantages
and purposes of NAFTA was the reduction or full elimination of taxes on imported goods between these three countries. Since 2008, all tar- iffs on agricultural exports between the United States and Mexico no longer exist, and many are elimi- nated between Canada and Mexico. However Canada and Mexico still tax sugar, eggs, poultry and dairy products. The reduced or elimi- nated tariffs make it easier for these nations to trade with each other.
The decreased trade restrictions
brought about by NAFTA have made it easier for Americans to pur- chase Canadian and Mexican goods. As of 2010, the most recent year for which these data were available, the United States received about a quarter of its imports from these two countries, which are its second and third largest suppliers of im- ported goods. In particular, the U.S. gets much of its crude oil, vehicles,
machinery and gold from these two countries, as well as fresh produce, snack foods, live animals, red meat and chilled and frozen foods. NAFTA is credited with signifi-
cantly increasing trade among the U.S., Mexico and Canada. The U.S. alone traded $1.6 trillion in goods and services with its NAFTA partners in 2009, the latest year for which data are available, and the U.S. sold 32.2% of its exports to Canada and Mexico in 2010. Trade of goods and services between the U.S., Canada and Mexico has increased from $337 billion in 1993, before NAFTA went into effect, to $1.182 trillion in 2011. NAFTA may have eliminated
tariffs between the U.S., Canada and Mexico, but it didn't do away with the numerous customs regula- tion that can stifle trade. Rule of origin regulations decide whether a good qualifies for trade under NAFTA guidelines, and exporters must complete certificate of origin paperwork. More rules determine what records businesses must keep for trades under NAFTA and for
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