POLI 243 Chapter Notes - Chapter 22: North American Free Trade Agreement, Comparative Advantage, Office Of The United States Trade Representative
Document Summary
Canada and the free trade agreement with the us. Background: the historical parameters of the us-canada relationship. Improvements in trade were hope to stimulate the economy. Canadian firms needed higher economies of scale to maintain competitiveness thus they needed access to the us market. Gatt was in trouble by the early 1980s. As more and more countries entered international trade, and rich countries were downturned economically and rising interest rates= protectionist pressures. Non-tariff barriers (ntbs) became prevalent as gatt blocked most tariff rises. Feared that gatt would begin a steady decline and then fail altogether. Free trade agreement btwn us & canada was a just-in-case gatt fails not gatt replacement. It was the popular perspective that trade relations with the us would leave canada vulnerable so many wanted to lessen economic dependence on the us as much as possible or regulate it. Gov"t took distancing actions b/c of this attitude.