Since 1994, trilateral trade has generated economic growth and rising standards of living for the people of all three member countries. By strengthening the rules and procedures governing trade and investment throughout the continent, North American Free Trade Agreement (NAFTA) proved to be a solid foundation for building Canada’s prosperity.
On July 1, 2020, the new Canada-United States-Mexico Agreement (CUSMA) entered into force. The CUSMA will serve to reinforce Canada’s strong economic ties with the United States and Mexico. CUSMA outcomes preserve key elements of the long-lasting trading relationship and incorporate new and updated provisions that seek to address 21st-century trade issues and promote opportunities for the nearly half a billion people who call North America home.
By any measure, trilateral free trade has been a success by serving as a basis to grow both trilateral and bilateral North American relationships and the results speak for themselves. This integration helps maximize our capabilities and make our economies more innovative and competitive.
In particular, NAFTA, and now CUSMA, have supported the development of an integrated and competitive North American market by providing manufacturers, producers, investors and consumers with a predictable and secure commercial environment.
From a trilateral perspective, North American free trade agreements have contributed to an unprecedented increase in trade flows across the continent since NAFTA’s implementation in 1994. Between 1993 and 2021, total merchandise trade between Canada and the United States tripled and total merchandise trade between Canada and Mexico grew more than 8-fold. Overall, total trilateral merchandise trade (the total of each country’s imports from one another) has quadrupled since 1993 to reach nearly US$1.2 trillion in 2021.
Cooperation through NAFTA and CUSMA has created a North America where Canadian, American and Mexican companies do more than make and sell things to each other, now, our companies increasingly make things together.
Investment
North American free trade agreements’ provisions ensure greater certainty and stability for investment decisions by guaranteeing fair, transparent and non–discriminatory treatment of investors and their investments throughout the free trade area.
NAFTA and CUSMA have contributed to enhancing Canada’s attractiveness to foreign investors while providing more opportunities for Canadians to invest in North American partners’ economies. Investment is a key pillar of economic growth. At the end of 2020, the stock of investment in Canada from our North American partners was CA$459.1 billion (CA$456.8 billion from the U.S. and CA$2.3 billion from Mexico), while Canada had invested CA$697.9 billion in our two North American partners (CA$669.1 billion in the U.S. and CA$28.8 billion in Mexico).
Canada and the U.S. have one of the world’s largest investment relationships with a bilateral investment stock totalling more than CA$1.1 trillion in 2020, a 7-fold increase since 1993, according to Canadian statistics.
The stock of Canadian direct investment in Mexico has increased dramatically since NAFTA entered into force, reaching more than CA$28.8 billion in 2020, up from only CA$530 million in 1993.
