NAFTA creates a free trade area, as opposed to a customs union or a common market, due to the fact that:
◦ the governments of all three nations decided to eliminate tariffs.
◦ the issue of illegal immigration from Mexico to the United States is resolved.
◦ restrictions are imposed on labor movements among members.
◦ the agreement does not leave the door open for discretionary protectionism.
◦ restrictions are imposed on the use of goods, services, and investments.