UNITED STATES–CANADA FREE TRADE AGREEMENT

UNITED STATES–CANADA FREE TRADE AGREEMENT (1988). President Ronald Reagan and Prime Minister Brian Mulroney signed the United States-Canada Free Trade Agreement (FTA) on 2 January 1988. The agreement went into effect on 1 January 1989, after implementing legislation was passed in each country. The FTA was an attempt to expand the markets of each country by reducing the barriers to trade in goods, services, and investment. The main goal of the agreement was to eliminate all tariffs on trade between the United States and Canada by January 1998. In addition it provided a code of principles on service trade and improved access to government procurement. The agreement addressed foreign investments, telecommunications, tourism, financial services, bilateral energy trade, and provided procedures for dispute settlement. It was viewed by many as a North American response to the increase in competition due to free trade in Europe, as a result of the European Economic Community, and in the Asian Pacific Rim countries. The agreement was suspended on 1 January 1994 when the North American Free Trade Agreement (NAFTA) went into effect. In addition to including Mexico, NAFTA also mandated free trade in areas that had only been principles of agreement in FTA. Until the passage of NAFTA, the FTA was the most comprehensive bilateral free trade agreement.

BIBLIOGRAPHY

Ritchie, Gordon. Wrestling with the Elephant: The Inside Story of the Canada-US Trade Wars Toronto: Macfarlane Walter and Ross, 1997.

Schott, Jeffery. United States-Canada Free Trade: An Evaluation of the Agreement. Washington, D.C.: Institute for International Economics, 1988.

Steger, Debra. A Concise Guide to the Canada-United States Free Trade Agreement. Toronto: Carswell, 1988.

Shira M.Diner

See alsoFree Trade .