The US-Canada Trade Bond
The Free Trade Agreement between Canada and the United States of America (officially known as the Canada–United States Free Trade Agreement, or CUSFTA) was a bilateral trade agreement that was reached on October 4, 1987, by negotiators representing Canada and the United States, and signed on January 2, 1988, by the leaders of both nations. As an upgrade over the previous trade pact replaced, the agreement phased out a wide range of trade prohibitions over a ten-year period and led to a significant rise in cross-border trade.[1] The North American Free Trade Agreement (NAFTA) (French: Accord de libre-échange nord-américain (ALENA), Spanish: Tratado de Libre Comercio de América del Norte (TLCAN)) replaced the Community-United States Free Trade Agreement (CUSFTA) upon the entry of Mexico in 1994.
The following were the primary goals of the Canada-United States Free Trade Agreement, as specified in the agreement
.jpg)
Remove obstacles to services and goods exchanged between the US and Canada Encourage fair competition in the free-trade zone that the Agreement has established. greatly loosen the restrictions on investment in that free-trade zone Provide efficient processes for the cooperative management of the Agreement and the settlement of problems.
Provide the groundwork for future bilateral and international collaboration to increase and improve the Agreement's advantages[3].
Context
Also see: Canadian politics of reciprocity
Under the terms of the Reciprocity Treaty, free trade between the colonies of British North America and the United States was established beginning in 1855, while Canada was governed by the British. The United States Congress decided to revoke the pact in 1866, one year before to Canadian Confederation. Following his unsuccessful attempt to restore reciprocity, Canada's first prime minister, John A. Macdonald, switched the country's government to a more protectionist program known as the National Policy. Many politicians began to worry that deeper economic connections with the US would result in political annexation.[4]
Canada's Liberal Party has long been an advocate of free trade.[4] One of the main issues in the 1911 Canadian federal election was free trade in natural products. The Liberals were defeated by the Conservative Party's anti-American campaigning. It would be many decades before the free trade debate in Canada returned to this degree of national significance.
The two countries signed several bilateral trade agreements between 1935 and 1980, which significantly lowered tariffs in both countries.[5] The 1960s Automotive Products Trade Agreement, or "Auto Pact," was the most important of these agreements.[6][7]
Following the Auto Pact's signing
.jpg)
the Canadian government thought about putting out proposals for free-trade agreements in other economic areas. The US government, on the other hand, was less amenable to this notion and actually desired to take down a few of the Pact's promises. The topic of a more comprehensive free-trade deal between the two nations caught the attention of Canadians.[8]
Many academic economists examined the implications of a free trade agreement between the two nations throughout the course of the following 20 years. Many of them—Ronald Wonnacott and Paul Wonnacott[9], Richard G. Harris and David Cox[10]—came to the conclusion that the removal of trade barriers and tariffs between the United States and Canada would result in a significant increase in the real GDP of Canada and enable Canadian industry to produce on a larger, more efficient scale. Richard Lipsey of the C. D. Howe Institute and John Whalley of the University of Western Ontario were two more pro-free-trade economists.[11]
Others worried that free trade would have unfavorable consequences, thinking that increased economic links with the "Giant to the South" would jeopardize Canadian sovereignty and lead to capital flight and employment instability due to overseas outsourcing. David Crane of the Toronto Star, one of the top newspapers in Canada, and Mel Watkins of the University of Toronto were among the opponents.
The possibility of a bilateral free-trade negotiation was the subject of several government studies, including the Economic Council of Canada's 1975 study Looking Outward, the Senate Standing Committee on Foreign Affairs's 1975, 1978, and 1982 reports, and the 1985 report of the Macdonald Commission, which was chaired by former Liberal politician Donald Stovel Macdonald and was formally known as the Royal Commission on the Economic Union and Development Prospects for Canada. "Canadians should be prepared to take a leap of faith"[12] in order to pursue more open trade with the US, according to Macdonald. Despite their opposition to a free-trade policy during the 1984 Canadian election campaign, Prime Minister Brian Mulroney's Progressive Conservative Party accepted the commission's recommendations despite Macdonald's prior service as a Liberal Minister of Finance. The groundwork for the start of free-trade talks was laid.[13]
Talks
.jpg){kind=spacer}
US Congress granted President Ronald Reagan the power to sign a free trade deal with Canada, provided that the agreement be submitted for Congressional review by October 5, 1987. President Reagan praised the Canadian initiative. Canadian and American officials started trying to iron out a trade agreement in May 1986. Peter O. Murphy, a former deputy US trade representative in Geneva, led the US team, while Simon Reisman, a former deputy minister of finance, led the Canadian team.
Throughout the discussions, Canada maintained its right to defend its cultural industries as well as fields like health care and education. Furthermore, certain resources, including water, were supposed to be excluded from the pact. The Canadians were unable to secure contracts for American government procurement through free competition. Additionally, Canadian negotiators were adamant on a dispute resolution procedure being included.[14]
.jpg)
Comments
Post a Comment