NAFTA has not eliminated regulatory requirements for companies wishing to act internationally, such as rules of origin and documentation obligations, that determine whether certain products can be traded under NAFTA. The free trade agreement also provides for administrative, civil and criminal sanctions for companies that violate the laws or customs procedures of the three countries. The United States, Mexico and Canada have agreed on several provisions to reduce the use of trade-distorting policies, the legislation of which was developed under President George H. W. Bush as the first phase of his Enterprise for the Americas initiative. The Clinton administration, which signed NAFTA in 1993, believed it would create 200,000 U.S. jobs in two years and one million in five years, as exports would play an important role in U.S. economic growth. The government expected a dramatic increase in U.S.
imports from Mexico due to lower tariffs. The agreement entered into force on August 1, 2006. All bilateral trade in industrial goods and consumer goods will be exempt from tariffs as soon as the agreement enters into force. In addition, Bahrain and the United States will provide immediate duty-free access to virtually all products in their tariff plans and will eliminate tariffs on the handful of remaining products within 10 years. It is impossible to isolate the effects of NAFTA in the larger economy. For example, it is difficult to say with certainty what percentage of the current U.S. trade deficit, which reached a record $65,677 million at the end of 2005, is directly attributable to NAFTA. It is also difficult to say what percentage of the 3.3 million manufacturing jobs that were lost in the United States between 1998 and 2004 is the result of NAFTA and what percentage would have been created without this trade agreement.
It cannot even be said with certainty that the intensification of trade between NAFTA countries is exclusively the result of the trade agreement. Those who support the agreement generally claim NAFTA loans for enhanced trade activity and reject the idea that the agreement has resulted in job losses or a growing trade deficit with Canada and Mexico ($8,039 million and $4,263 million respectively in December 2005). Critics of the agreement generally associate it with these deficits and job losses. Additional ancillary agreements have been adopted to allay concerns about the potential impact of the treaty on the labour market and the environment. Critics feared that generally low wages in Mexico would increase the United States.