Canada-US Free Trade Agreement (NAFTA)

Throughout the long history of the Canada-United States relationship there has been an ongoing discussion about the most effective way to operate trade between the two countries. In the twentieth century, Canada and the United States signed three separate trade agreements that shaped their economic relationship and acted as a new example for how other countries could formulate their own trade agreements. These first two major agreements would build off one another to help create the North American Free Trade Agreement, an agreement that is still in use today and continues to create debate and discussion by the three signatory countries.

Beginning in 1965 with the Canada-US Automotive Products Agreement or the Auto-Pact, Canada and the US began the process of creating and implementing a trade agreement that would hopefully benefit both countries equally. Signed under the leadership of Prime Minister Lester B. Pearson and President Lyndon B. Johnston, the Auto-Pact created a single North American market for passenger cars, trucks, buses, tires and automotive parts. In an address to the House of Common in 1966, Buddy Drury the Minister of Industry explained that the limited production volumes and the duties on important parts hindered Canadian auto manufactures from competing with their American counterparts. Before the implementation
NAFTA provided a solid foundation for building Canada’s prosperity and set an example to the rest of the world about the benefits of trade liberalization. Tariffs on all covered goods traded between Canada and the United States became duty free in 1989 in accordance with CUFTA and were brought forward under NAFTA and in 2008 tariffs were eliminated on all covered goods traded between Canada and