Canada's Relationship With Canada

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During the early 1900’s, Canada’s biggest economic partner was Britain. Soon, United States took their place and created a long-lasting relationship with Canada. Canada and the United States have strengthened their relationship as economic partners throughout the 20th century in terms of American investment, the Auto Pact, as well as both North American Trade Agreements. To start off, Canada began to strengthen their relationship with United States as economic partners in the 20th century by allowing American investment in the country from the early 1920s. From the mid-19th century up till World War One, Britain was Canada’s biggest investor. During this time, United States was working on it’s economy, and started to consider investing in…show more content…
The success of the Auto Pact led Canada to think that it could develop a bigger relation with the U.S. by allowing free trade on all products. Canada’s hopes were to gain more competitors, encourage the extraction of natural resources, and attract other countries to invest in theirs (26). In 1985, Canada and the U.S. started discussing about the Free Trade Agreements. Brian Mulroney of the Conservatives was the one to sign this agreement right after he was elected as Prime Minister in 1988 (27). Under this agreement that took effect on January 1, 1989, the countries took away tariffs on most products, Canada’s right to put taxes on exports from the energy sector, and gave companies of the U.S. the right to sue Canadian companies if policies were clashing against the agreement (28). Right after this agreement was passed, a newer agreement, the North American Free Trade Agreements was brought up to include Mexico. Canada was not as interested in adding Mexico, but Mulroney discussed it anyways, because denying it would create a possibility of United States signing a separate agreement with Mexico, and creating stronger ties with them than Canada (29). By adding Mexico to this agreement, the countries would create a free-trade market of 390 million people (30). Canadian businesses urged Canada to join NAFTA, arguing that the country…show more content…
The U.S. started investing in natural resources, and then set up branch plants for timber. After that, they started buying Canadian businesses, making Canada drift away from Britain and become closer to the States. During the 1960’s, the Auto Pact was signed to stop Canada’s annual trade deficit, and lower the cost of cars for Canadian consumers. This was a boost to the auto industry since it brought Canada into a free-trade environment, though it ended as it violated International Trade Law. The ending of the Auto Pact led to the signing of the Free Trade Agreements signed with the U.S., which removed tariffs on most products. By 1994, this evolved into the North American Free Trade Agreements now that Mexico was included, and has become known as biggest free trading market in the world, forming a strong economic
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