CHAPTER 22: CANADA AND THE FREE TRADE AGREEMENT WITH THE U.S.

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4 Apr 2012
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CHAPTER 22: CANADA AND THE FREE TRADE AGREEMENT WITH
THE U.S.
Background: The Historical Parameters of the U.S. Canada
Relationship
Auto pact: Introduced waivers on the duty for original
equipment parts and automobiles allowing for firm integration
(automobiles)
Fears of the New Protectionism
The GATT rules increased NTB (non tariff barriers) ! a new
form of protectionism
As the Uruguay Round dragged on people became scared of
the future of free trade
Canada’s Attitude Toward the U.S.
Nixon Shocks ! scared that at any moment the playing field
could change, needed to lessen dependence on the U.S.
Canada and the U.S. have the largest trading partnership in
the world
U.S. Priorities
U.S. goals: get issues such as liberalization of trade in
services on the world’s agenda and open up investment
opportunities and put in place controls on intellectual
properties
Canada’s System Level Concerns: Insuring a Future with Free Trade
Doubts with the Uruguay Round ! needed reassurance for
access to free trade
Canada wanted a clear set of rules in which disputes would be
solved
Worries about the future of the systemic environment pushed
Canada to initiate the talks
Problems with System Level Arguments
Timing! the fear of the breakdown of GATT was not new
Too vague
Domestic Politics: The Electoral Strategy of the Tories
One of the domestic splits was differing provincial interests
The Liberals were divided within their party
Bureaucratic Politics: Canada’s Trade negotiations Office
Mulroney created the TNO and staffed it with free trade
supporters
Creating the TNO shows how important it was to Mulroney
and also shows how people play a big part in decisions made
Political Leaders and The Ideas they Shared
Mulroney and Reagan were friends
o Held similar ideologies, similar backgrounds, similar
party platforms
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