Regional integration and co-operation among two or more countries facilitate them to enjoy the benefits of all resources in an efficient manner. The co-operation among European countries is the best example of this. During 1980’s the United States has increasingly turned its attention to the liberalization of Regional trade. Accordingly, the Canada - United States Free Trade Agreement (CAFTA) came into existence and negotiations were initiated with Mexico to from a trilateral North American Free Trade Agreement (NAFTA) (Drusilla K. Brown, 1992). There were great economic disparities between the United States and Canada on the one hand and Mexico on the other. An economic integration particularly between United States and Mexico has several implications. By establishing such a free trade United States has opened the way to closer economic relations with countries of Latin America and the Caribbean, thereby laid foundations for a free trade system in the entire western hemisphere ( Philip Martin,1995). The NAFTA came into effect in 1 January 1994.