The North American Free Trade Agreement (NAFTA) became effective in Canada, Mexico, and the United States on January 1, 1994. This agreement removed the tariffs and other trade barriers on goods produced and sold in North America. NAFTA was built upon a prior 1989 trade agreement between the U.S. and Canada that was responsible for tariff reductions between the nations. NAFTA forms the world's second largest free trade area. The largest free trade area is the European Economic Area, which also became effective in 1994.
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