The 1988 Free Trade Agreement

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To ask why Canada entered the 1988 free trade agreement with the United States of America is to ask a complicated question that is likely to garner a different answer from each respondent. The best that one can do when analyzing the multitude of components that led to this agreement is to eliminate any pre-conceived notions that they may hold about liberalized trade, and attempt to objectively assess the issues that this country faced in the years leading up to 1988. Free trade between Canada and the US is likely one of the most contentious issues that our country has ever faced. This becomes apparent when studying Canadian history throughout the 19th and 20th centuries. Canadian economic development has flourished, and been stunted, as a result of our overwhelming dependence on export of ‘staples’ to the US.
A lengthy analysis could be given discussing the reasons why our economy has evolved to become so dependent on one nation for its development. However, this analysis is mainly concerned with the direct issues which led Canada into the FTA on January 1st, 1989. To begin, we must discuss the fiscal uncertainty that was caused by two economic recessions, the first to occur since the Great Depression, and the subsequent measures which the governing Liberals adopted to combat the problem. Secondly, a worldwide ideological shift had begun during the 1970’s favouring the adoption of neo-liberal free market principles which championed free trade agreements. Thirdly, the emergence of global regional trading blocs, and increased US protectionism led Canadians to ponder their economic position in a changing global environment. Finally, and perhaps most importantly, the 1980’s marked the decade in which corporate power manifested i...

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... Investment in Canada (Ottawa: Government of Canada, 2012) Last modified 2012, 04.

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