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Nafta Impact On Canada

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NAFTA is an agreement between Mexico, Canada, and the United States that came into effect on January 1st, 1994; this treaty held a lot of historical significance since it was a turning point for Canada’s development and for the prosperity they would face in the following decades. NAFTA stands for North American Free Trade Agreement; and as the name implies, it was a trade agreement that eliminated tariffs from being placed on imported and exported goods between the three countries. The origins of the treaty came from the FTA, which was another trade agreement established a few years prior on January 1st, 1989, between America and Canada. When the U.S. and Mexico were in negotiations of making a trade agreement similar to the FTA; Canada stepped …show more content…

But the one thing they all have in common is that they hold great historical significance since they have all changed Canada’s economy and created new allies. Both Mexico and the U.S. are directly related to treaty since they were the only other nations that are a part of NAFTA; and they are the two countries that have built the strongest relationships with Canada because trade with them has increased tremendously. “Some 78 percent of Canada’s total merchandise exports were destined to our NAFTA partners in 2015. Total merchandise trade between Canada and the United States more than doubled between 1993 and 2015. Trade between Canada and Mexico has increased over eight-fold over the same period.” This means that merchandise trade with America increased at a rate of about 4.6% a year; as for Mexico, it has grown at about 10.1% per year. Also, Canada is now the largest supplier of energy to America and their second largest market for services. Whereas Mexico has become Canada’s third largest trade partner and fifth largest export market. Overall, I believe it is very clear that America and Mexico have become valuable trade partners and have helped our economy to grow so in times of need, they can be trusted allies. Without this alliance, Canada wouldn’t be as developed as they are today. As for other relationships; the most significant …show more content…

These moments contain historical significance as they display the independence Canada has gained. Two of these moments are Canada’s decision to join NAFTA and the softwood dispute. Canada’s decision of joining NAFTA wasn’t due to them wanting tariff free trade; rather, they wanted access to the U.S. market. “Even before the free trade agreement, 80 per cent of Canadian shipments entered tariff-free”. This clearly shows that having tariff free trade would be of no benefit to Canada since they practically didn’t get charged on their exports anyway. And although Canada could sell their products in the U.S.; America used protectionism which are policies that help protect domestic producers from foreign competition. America would price Canadian products differently or use subsidies, which are grants of money given by a government to a business in order to keep the prices of products and/or services low. This gave America an unfair advantage in their markets. So if Canada was to join NAFTA, it would mean that America would have to stop protecting from products and services that came from Canada. In the end, this showed Canada’s decision making skills and their capability in helping their own economy grow. The other case was the softwood lumber dispute, in which the U.S. lumber industry complained that Canadian stumpage

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