The NAFTA trade agreement entered into
force on January 1, 1994. It
is the most comprehensive
and largest regional trade
agreement in the world, with
nearly 400 million people
producing over $8 trillion
dollars worth of goods and
services.
Several chapters of the
NAFTA help liberalize
services trade among Canada
Mexico and the United
States. In particular,
Chapter 12, Cross-border
trade in services; Chapter
13, Telecommunications;
Chapter 14, Financial
Services (including
insurance); and Chapter 11,
Investment, all apply to
services trade.
NAFTA strengthens rules
and covers trade in all
service sectors, unless a
member country identifies a
sector as an exception to
coverage. Thus, the
Agreement opens new market
opportunities for U.S.
service companies by
allowing them to provide
services directly from the
United States on a
non-discriminatory basis
(cross-border supply). It
encourages elimination of
citizenship requirements for
licensing and certification
of professionals. In
financial services, the
NAFTA provides for
significant, phased openings
of the Mexican banking and
insurance markets, as well
as for party-to-party and
investor-to-party dispute
settlement mechanisms.
Finally, NAFTA provides
comprehensive disciplines to
ensure foreign investors are
treated like all other
investors. Thus the
agreement facilitates
delivery of services through
use of a foreign subsidiary.
