Free Trade Agreement Canada and Mexico

Free Trade Agreement between Canada and Mexico: An Overview

The Free Trade Agreement (FTA) between Canada and Mexico is a bilateral agreement that was signed in 1994. It is one of the most comprehensive free trade agreements in the world, covering a wide range of sectors including agriculture, textiles, automotive, and services.

The FTA has had a significant impact on the economies of both Canada and Mexico, promoting trade and investment between the two countries. Since its implementation, trade between Canada and Mexico has more than tripled, reaching around $20 billion in 2020.

Benefits of the FTA

The FTA has brought several benefits to both Canada and Mexico. In Canada, the agreement has created new opportunities for Canadian businesses to access the Mexican market, which has a population of over 130 million people. Canadian businesses can export goods and services without facing tariffs, quotas, or other trade barriers.

In addition, the FTA has attracted foreign investment to both Canada and Mexico, leading to the creation of new jobs and economic growth. Some of the major industries that have benefited from the FTA include automotive, mining, and manufacturing.

For Mexico, the FTA has opened up a new market for Mexican goods and services in Canada, which is the world`s tenth-largest economy. Mexican businesses can now export their products to Canada at a lower cost, and without facing trade barriers. This has led to increased investment in Mexico, particularly in the automotive and aerospace sectors.

Challenges and Controversies

While the FTA has brought many benefits to both countries, it has also faced challenges and controversies. Some Canadian business owners and workers have voiced concerns about the impact of the agreement on jobs and wages. They argue that the FTA has led to the outsourcing of jobs to Mexico, where labor is cheaper.

In Mexico, there have been concerns about the impact of the FTA on small businesses, which may struggle to compete with larger companies. In addition, some critics argue that the agreement has led to environmental degradation and a decrease in labor standards in both countries.


The Free Trade Agreement between Canada and Mexico has been a significant milestone in the economic relationship between the two countries. While it has brought many benefits, it has also faced challenges and controversies. Despite these issues, the FTA remains an important agreement that has strengthened trade and investment ties between Canada and Mexico, and will likely continue to do so in the future.