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The United States and Canada have a very strong relationship economically, politically and environmentally. They also share similar cultures as a result of trading. In 1989, the Free Trade Agreements (FTA) came into affect between Canada and the United States after years of intense public debates where many Canadians were divided on its obligations. Prime Minister Mulroney saw the FTA as a solution to building jobs, economic reforms and resolving the federal deficit. The Free Trade Agreement’s main purpose was to stimulate and increase cross-border trading as both nations have a common interest in establishing growth within their economies. The FTA would replace the practice of the General Agreement on Tariffs and Trade (GATT), a system that regulated tariffs. The FTA does not simply impact Canadian economical factors, but also political, cultural and environmental issues with the United States. When comparing the benefits and downfalls of the Free Trade Agreement, it becomes clear that the FTA undermines Canada’s potential. The FTA has impacted Canada negatively through Americanization, unfair obligations and economical potential.

Before elaborating on the negative impacts the FTA agreement, it is essential to review the main objectives of why Canada and the United States joined forces in the agreement. Each country had key motives and interests when joining the FTA and by comparing these aspects, one gains a sense of understanding how the agreement was implemented. In particular, there are three major objectives that Canada and the United States procured within the FTA. First, the United States were keen on lowering federal and provincial quality standards, which they perceived as a barrier to trade. From the Canadian standpoint, Canada was interested in protecting sensitive cultural industries that saw American trade as a threat. Secondly, Canada sought to preserve the FTA by establishing a system to resolve trading disputes. Much of this was prompted by the United States requesting that Canada to keep their promise within the FTA to remove aggressive screening on American goods. Thirdly, Canada wanted to gain access to the United States lucrative markets and sought the removal of tariffs on goods. Similarly, the United States also wanted removal of high tariffs on goods exported to Canada. These objectives made by both sides clearly elaborate a win-win proposal, as both countries would benefit economically by increasing trade. However when analyzing these factors further, it is clear that the United States was set to reap the benefits while Canada was expected to make more sacrifices as a result. The implementation of the FTA has caused two key parties in Canada the Liberals led by John Turner opposed the FTA while Conservative led by Brian Mulroney supported the agreement. This led both parties to run on the platform of endorsing or opposing the FTA. The Liberals argued that if Canada were to join the FTA Canada would lose its sovereignty because of aggressive Americanization. While the Conservative assured Canadians that culture would be protected as the intent of the FTA will be to create and enhance prosperity.

Free Trade had a major impact on culture.  The reliance on American based cultural products as opposed to Canadian goods greatly impacts the Canadian identity. Cultural production consists of periodicals, books, films, and television programs; which further establish Americanization within the Canadian culture. For instance, the United States has historically been on the forefront of establishing film productions, music, dancing and even the Internet. Cultural production is vital to the United States as it turns over billions of dollars annually that helps pay American deficits within trades. This depicts the importance of American culture as being an influential agent not only to other cultures, but also as a key economical export that the United States relies upon. Graham Carr, who is a scholar on American and Canadian culture, asserts that Americanization within the FTA is vital part of United States foreign policy. “Far from being a secondary or isolated item on the international policy agenda, the cultural dossier has long held an important place in American diplomatic strategy and is increasingly integral to the overall framework of U.S commerce.” He suggests that the United States establishes and attempts to intertwine culture within politics and economics in order to reinforce the United States supremacy. Although the FTA does allow cultural industries to be exempt from the agreement yet it fails to protect Canadian industries in the same regard. “Canada has attempted to shelter its cultural industries from the provisions of both arguments…. This protection has failed.” Even if the FTA provides protection against Americanization in written text, it still significantly affects Canadian industries. The FTA promise to protect Canadian culture could be easily ignored as the United States attempted to redefine culture as ‘information’. By redefining culture into information, the United States can protect their vital resource and information as a broad term to include computers, software, media, music, dance, graphics and texts. This ‘information’ would also be liable to copyright laws and intellectual property laws.   

Americanization of cultural products has affected Canadian culture as well as its cultural industries. American firms lobbied for cultural products to be redefined as intellectual property or as a service considering it would save industries roughly twenty billion dollars a year. For instance, by redefining culture as information in the 1980’s, it was estimated that the United States saves globally, 700 million on sale of books and periodicals, 250 million on sales of sound recordings and nearly 1 billion dollars on film and video sales. This elaborates that the FTA agreement greatly benefits the United States while destroying any hopes for Canadian cultural products that would have to compete with American firms. A key concern with removing these tariffs on American products was that Canadian industry cannot compete with tariff-free American products leading to massive unemployment.

After the Free Trade Agreement came into full force, the debate in Canada shifted on the unfair obligations that the agreement forced onto Canada. The FTA prevented the Canadian government from altering or developing future resources and capital policies with other nations. For instance, the FTA agreement established a commitment to supply the American market with energy, even during times of shortage, making it very difficult for Canada to establish trade relations with other nations. The FTA also harmonized Canadian laws and product standards, degrading environmental and high-quality Canadian social services. For instance, The Pesticide Products Control Act had been harmonized to follow the American standards, which requires the balancing of health affects with economic losses in regards to the use of pesticide. In Canada, the use of pesticide was heavily regulated and held higher standards than the United States. However, as a result of the FTA, the Canadian standards eroded. The FTA agreement did not ensure complete access to the American market as it kept trade laws intact. This allowed the FTA to strike down Canadian laws or standards. For example, the Fisheries Act was implemented to ensure conservation and sustainability of Canadian fishers. An aspect of the act required for fish to be caught and biologically sampled to ensure they did not contain traces of asbestos. However, the regulations for fisheries and other environmental standards plummeted because of the FTA. A critical issue of the FTA made all trade disputes secretive and inaccessible to the public. This made it very difficult for lobbyists or political parties to run for platforms that would seek to resolve trade disputes. The FTA increased Canada’s dependence on American commerce, with over three-fourths of Canada’s trade tied with the United States. This dependence on one nation also brought in political pressure to conform certain trade policies. As witnessed in 1971, President Nixon imposed an import surcharge on all U.S imports, severely harming Canada’s economy during that period, with the FTA this dependence would only be amplified. The framework of the FTA established unfair laws and obligations, which only seemed to benefit the United States. These unfair obligations within the FTA committed Canada to supply the raw resources exclusively to the United States while lowering Canada’s standards on goods.

The FTA has excessively damaged Canadian cultural production, and lowered its policy standards, thus significantly affecting the environment all for the sake of economic prosperity. Since the implementation of the FTA in 1989, the Canadian and American economies have more then doubled. Although Canada’s economy has grown, there are severe consequences as a result of the FTA. From 1989 to 1998, Canadians disposable income has declined by 5% while the United States has enjoyed an increase of 12%, after adjusted inflation. This indicates that the promise of prosperity that the FTA was supposed to bring was one-sided, only benefiting the United States. For Canada, it appeared wise to sign the agreement in order to increase job opportunity.  Although this was the intention, between 1988 to 1995,  job creation in the manufacturing sector declined by 19% as a result of the FTA. The manufacturing sector was a critical sector in Ontario that many Ontarians depended on for jobs; yet, the FTA took many of these jobs to the United States.

The FTA has accomplished its intended purpose in some respect. Trade between Canada and United States has increased rapidly.  The exports of Canada to the United States increased to a whopping 139% from 1989 to 1995 as a direct result of the FTA.  However, even though trade between the two nations increased, this data suggests that job opportunity and income levels for Canadians dropped lower. American and Canadian firms shifted their branch corporations in favor of the highly lucrative American market. In the 1980’s, Canada was also experiencing a recession thus the move did not help the already unsteady time in the Canadian economy. The FTA has also undermined Canada with the Foreign Direct Investment (FDI) levels, which fell from 21% to 14% of the North American share in 1990. This figure is a concerning as the FDI was meant attract business, boost capital and create jobs for Canadians. Before the implementation of the FTA, Canada’s FDI levels were much higher. When the numbers fell post-FTA, the American firms took advantage of Canada’s resources through liberalization, luring foreign investors to favor American firms over Canadian. It is important to recognize that Canada and the United States had three-quarters of trade already duty-free, while the tariffs imposed on other goods were implemented to help local industries compete with American goods. This implies that Canada implemented policies to help domestic corporations grow, yet were willing to sacrifice protection for Canadian industries in the hopes of gaining secure access to the American market. The access of the American market was a significant factor for Canada when joining the FTA. There were benefits to the FTA – reduction of tariffs and liberalization, specifically for Detroit and Windsor, where the bridges and ports between the two nations boosted trade. Although the American market is ten times larger then the Canadian market, there was still a large market that American firms recognized. Thus, gaining access to this market would allow a great opportunity for American firms to expand within Canada. Although the FTA resulted in a loss of jobs and lowered income, it is still too early to pinpoint whether it undermined Canada’s economy. Other factors, like the recession, may have played a major role in the downfall of Canada’s economy.

The Free Trade Agreement between Canada and the United States has destabilized Canada through Americanization, unfair obligations and economic potential. The Americanization of Canadian culture has made it difficult for Canadian cultural goods to compete within a free market concept. The FTA also imposed policies that harmonized Canadian standards and lowered environmental policies. For Canada, the FTA hurt the nations economical potential from 1989 to1995, leading to loss income, FDI disparity and loss of jobs in the manufacturing sector. When analyzing the FTA agreement, it is evident that it caused more harm than good. Reforms within the FTA would be essential if Canada were to ever benefit from the agreement.

Word Count: 1988 words

Works Cited

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