Nafta is an agreement between the united states of america, mexico and canada, coming into effect on january 1, 1994. Nafta called for immediately eliminating duties on half of all u. s. goods shipped to. Mexico and gradually phasing out other tariffs over a period of about 14 years. An expansion of the earlier canada-u. s. free trade agreement of 1989. The agreement removed several trade restrictions in stages over a ten year period, and resulted in a great increase in cross-border trade. The agreement greatly liberalized trade between the two countries, removing most remaining tariffs. Canada desired unhindered access to the american economy. Americans, in turn, wished to compete in canada s energy and cultural industries. Canada retained the right to protect its cultural industries and such sectors as education and health care. Trade between canada and the united states began to increase rapidly.