North American Free Trade Agreement (NAFTA)

A free trade agreement among the United States, Canada, and Mexico that removed most barriers to trade and investment. It was renegotiated and replaced by the United States–

Mexico–Canada Agreement (USMCA), signed in 2018.

Other regional and bilateral trade agreements, including the 2003 U.S.– Singapore Free Trade Agreement and the 2004 U.S.–Dominican Republic– Central American Free Trade Agreement (CAFTA-DR), were negotiated in the same spirit as NAFTA/USMCA. The CAFTA-DR export zone, which was implemented on a rolling basis between 2006 and 2009, is the United States’ second largest free trade zone in Latin America after Mexico. In 2017, two-way trade totaled more than US$54 million.

Agreements like NAFTA/USMCA and CAFTA-DR not only reduce barriers to trade but also require additional domestic legal and business reforms in developing nations to protect property rights. Most of these agreements now include supplemental commitments on labor and the environment to encourage countries to upgrade their working conditions and environmental protections, although some critics believe the agreements do not go far enough in ensuring worker rights and environmental standards. Partly due to the stalled progress with the WTO and FTAA, the United States has pursued bilateral trade agreements with a range of countries, including Australia, Bahrain, Chile, Colombia, Israel, Jordan, Malaysia, Morocco, Oman, Panama, Peru, and South Korea.