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About NAFTA

NAFTA Background The goal of the North American Free Trade Agreement (NAFTA), which was signed in 1992 by Canada, Mexico and the U.S. and took effect on Jan. 1, 1994, was to establish a free-trade zone in North America. It immediately lifted tariffs on the majority of goods produced by the signatory nations, and called for the gradual elimination of the remaining barriers to cross-border investment and to the movement of goods and services among the three countries. The last remaining barriers were eliminated at the beginning of 2008. The objective of NAFTA is to promote an environment of free competition, increased market access and improved investment opportunities for small and medium-size businesses.

How NAFTA has benefited North America  Today, NAFTA links 442 million people in a market that produces $15.4 trillion worth of goods and services annually. From 1993 to 2007, trade among the NAFTA nations more than tripled, from $297 billion to $930 billion, resulting in the largest trading area in the world. Canada and Mexico purchase more U.S. exports than all of Europe and purchase about 35 percent of total U.S. exports. Manufacturing exports in 2007 reached an all-time high with a value of $982 billion. For agriculture, Canada and Mexico alone account for 50 percent of the increase in U.S. agricultural exports to the world since 1993. In fiscal year 2007, two-way agricultural trade between the U.S. and Mexico was valued at a record $22.2 billion, a nearly fourfold increase over FY 1993, when two-way trade was valued at $6.4 billion. Mexico is the top U.S. export destination for beef, rice, soybean meal, corn sweeteners, apples and dry edible bean exports. It is the second export market for U.S. corn, soybeans and oils, and third-largest for pork, poultry, eggs and cotton. Sources: The Office of the United States Trade Representative: NAFTA Facts, March 2008, and NAFTA Policy Report, October 2007.

NAFTA Rules of Origin The purpose of the NAFTA Rules of Origin is to ensure that North American goods traded among the three NAFTA partner countries receive preferential tariff treatment. The NAFTA Rules of Origin take into account where goods are produced and what materials are used to produce them. For exports, the goods must be wholly owned or produced entirely in Canada. If foreign components are used, the foreign component must undergo sufficient processing to meet NAFTA requirements. The NAFTA Rules of Origin applicable to any particular product can be found in Annex 401 of NAFTA.

NAFTA Certificate of Origin To prove that goods qualify under the NAFTA Rules of Origin for preferential treatment, exporters complete the NAFTA Certificate of Origin, a common form used by Canada, Mexico and the U.S. The NAFTA Certificate of Origin must be completed by the exporter. A producer or manufacturer in a NAFTA territory can assist an exporter by completing a Certificate of Origin, which will then be used as a basis for the exporter's final NAFTA Certificate of Origin. FedEx Trade Networks can assist you with properly classifying your products and producing valid NAFTA Certificates of Origin. For more information, call FedEx Trade Networks at 1.866.268.7602. Get additional information about the NAFTA Certificate of Origin.