will likely draw Canada even more closely to the American economy.
The FTA was negotiated by the Reagan Administration in the US and the Mulroney Government in Canada over a 16 month period in 1986 and 1987. The agreement became effective on 1 January 1989.
In the 1980s, Canada exports approximately US$90 billion in goods and services to the United States, while the United States exports approximately US$50 billion in goods and services to Canada (Council of Economic Advisers, 1989). Most of these goods and services cross the border free of duties and 3other barriers; however, there are some important exceptions ("Big Hug from Uncle Sam," 1987). Prior to the FTA, Canada's Foreign Investment Review Agency (FIRA) made it difficult for American interests to acquire Canadian firms. Further, Canada protected its agricultural, financial, and cultural industries from much of the potential American competition. Similarly, the United States unilaterally imposed high tariffs on many Canadian goods, as a means of protecting American industries. Examples are wood shingle shakes, softwood lumber products, steel, fish, and some agricultural products. Among other objectives, the FTA was designed to end these barriers to trade between the two countries.
With respect to a free trade agreement between the United States and Canada, each country is, in reality, pursuing different goals. The
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