Trade Relations between the United States and Mexico

The two geographically closest trading partners to the United States are Canada and Mexico. On 1 January 1989 the United States and Canada entered into a free trade agreement which will phase in the free flow of goods and services between the two countries over the next ten years. Free trade between Mexico and the United States progressed significantly when Mexico signed the General Agreement in Tariffs and Trade (GATT) in 1986. The culmination of this liberalization came on 12 August 1992 when the North American Free Trade Agreement (NAFTA) was concluded, and which could go into effect on 1 January 1994. The agreement will eliminate tariffs between Canada, the United States and Mexico over fifteen years.