Which agreement among the U.S., Canada, and Mexico encouraged free trade?

• A. NAFTA
• B. APEC
• C. European Union
• D. USMCA

Answer: (A)

Free trade agreements remove most tariffs and other barriers to trade among member nations, making it easier and cheaper to buy and sell goods across borders. The agreement among the United States, Canada, and Mexico did exactly that by gradually eliminating tariffs on many products traded among the three, setting rules of origin so that imports come from member countries, and providing mechanisms to resolve disputes. This created a freer flow of goods and investment across North America.

APEC is a broader Asia-Pacific forum rather than a single treaty for those three countries. The European Union is a European-wide bloc with its own extensive internal market, not North American. The newer agreement that followed NAFTA still supports free trade but is the updated version, not the original tri-country agreement that first established the free-trade relationship.