The Free Trade Agreement (FTA) between the United States and Canada is one of the most significant trade agreements in the world. It is a bilateral agreement that was signed by the two countries in 1988 and came into effect on January 1, 1989.
The FTA eliminated tariffs on goods and services traded between the two countries, including agricultural products, automobiles, and energy. It also eased restrictions on investment and trade in services, such as banking, insurance, and telecommunications.
The agreement has had a significant impact on both economies. According to a report by the U.S. International Trade Commission, U.S.-Canada trade increased by 61 percent between 1993 and 2018, reaching $714 billion in 2018. Canada is the largest trading partner of the United States, and the United States is the largest trading partner of Canada.
The FTA paved the way for the North American Free Trade Agreement (NAFTA), which expanded the free trade area to include Mexico. NAFTA was signed in 1994 and was in effect until 2020, when it was replaced by the United States-Mexico-Canada Agreement (USMCA).
The USMCA builds on the FTA and NAFTA and includes updated provisions on intellectual property, digital trade, and labor and environmental standards. It also includes new rules on the automotive industry and agricultural trade.
The free trade agreement between the United States and Canada has had a profound impact on both countries` economies over the past three decades. It has created jobs, expanded trade, and improved competitiveness. The agreement has become a model for other free trade agreements around the world, demonstrating the benefits of open and fair trade.