NAFTA is an acronym for which agreement?

• A. North American Free Trade Alliance
• B. North American Free Trade Agreement
• C. North American Finance Treaty
• D. North American Free Trade Act

Answer: (B)

Understanding what NAFTA stands for and the kind of instrument it is helps you see why this answer fits. NAFTA is the North American Free Trade Agreement, a trilateral treaty among the United States, Canada, and Mexico aimed at reducing trade barriers and integrating their economies. The phrase “Free Trade Agreement” signals that it’s a formal pact between governments to promote cross-border trade and investment, with rules about origin, tariffs, and dispute resolution. The other options use terms like “Alliance,” “Finance,” or “Act,” which describe different kinds of instruments and do not reflect the treaty's economic scope and formal nature. NAFTA was created to encourage freer trade across North America and was eventually superseded by the USMCA in 2020, but the acronym itself remains tied to that specific agreement name.