Final answer:
NAFTA was implemented in 1994, involving the United States, Canada, and Mexico, with the aim to eliminate trade barriers and promote the free flow of goods among these countries, leading to a significant increase in cross-border trade and investment.
Step-by-step explanation:
The North American Free Trade Agreement (NAFTA) was implemented in 1994. This trade agreement involved three North American countries: the United States, Canada, and Mexico. Its primary intent was to reduce barriers to trade and investment and to encourage the free flow of goods among these countries.
The negotiations for NAFTA began under U.S. President Ronald Reagan, were continued by President George H.W. Bush, and the agreement was signed by the leaders of the three countries in December 1992.
Despite concerns about job losses and environmental impacts, NAFTA was supported by President Bill Clinton, who added side agreements regarding labor and environmental protections, facilitating its ratification by Congress.
Trade and investment across the NAFTA countries increased significantly after its implementation, turning the region into one of the largest trading blocs in the world.
However, about eleven months after NAFTA's implementation, the Mexican economy faced a crisis, often referred to as the Tequila Crisis, which led to the devaluation of its currency and the need for a bailout from the International Monetary Fund (IMF).
Nonetheless, NAFTA has substantially reshaped economic activities across the borders of the United States, Canada, and Mexico, with marked increases in trade volumes and foreign investment.