Economic growth & 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 2016, total trilateral merchandise trade, as measured by the total of each country’s imports from its other two NAFTA partners, amounted to nearly USD $1.0 trillion – more than a threefold increase since 1993. In 2016, NAFTA partners represented 28% of the world’s gross domestic product (GDP) with just 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 $21.1 trillion in 2016.

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 2016, the stock of investment in Canada from our NAFTA partners was $CA393.8 billion (CA$392.1 billion from the U.S. and CA$1.7 billion from Mexico), while Canada had invested CA$491.2 billion in our two NAFTA partners (CA$474.4 billion in the U.S. and CA$16.8 billion in Mexico).

Canada and the U.S. have one of the world’s largest investment relationships with a bilateral investment stock totalling more than CA$866.4 billion in 2016, according to Canadian statistics.

The stock of Canadian direct investment in Mexico has increased dramatically since NAFTA entered into force, reaching nearly CA$16.8 billion in 2016, up from only CA$530 million in 1993.

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).

The text of the North American Agreement on Environmental Co-operation is available on the CEC website.

History