U.s.-Canada Free Trade Agreement

• Apr 07, 2022
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The United States-Canada Free Trade Agreement, commonly known as the FTA, is a trade pact between the United States of America and Canada. It is a comprehensive agreement that covers a wide range of topics, including trade in goods and services, investment, government procurement, intellectual property, and dispute settlement.

The agreement was signed on October 4, 1988, and went into effect on January 1, 1989. It was the first free trade agreement between two major industrialized countries and served as a model for the North American Free Trade Agreement (NAFTA), which includes Mexico as well.

The FTA eliminated most tariffs and many non-tariff barriers to trade between the United States and Canada. This led to increased trade and investment between the two countries, which has been beneficial for both countries. According to the United States Trade Representative, the FTA was responsible for tripling trade between the United States and Canada since its implementation.

In addition to increasing trade, the FTA also created new opportunities for investment. The agreement includes provisions that protect the intellectual property rights of investors and provide a framework for resolving disputes between investors and host governments.

One of the key features of the FTA is its dispute settlement mechanism. This mechanism allows companies to file complaints against governments for violating the terms of the agreement. The complaints are heard by an independent panel, which can order the government to change its policies or pay compensation to the affected company.

Overall, the United States-Canada Free Trade Agreement has been a success story for both countries. It has increased trade and investment, created new opportunities for businesses, and provided a framework for resolving disputes. It is a model for other free trade agreements around the world.