Canada-Us Free Trade Agreement

As the world`s largest trade relationship, the Canada-US Free Trade Agreement (CUSFTA) is a topic of great interest not just to businesses and policymakers, but to everyday citizens as well. With roots going back over three decades, this agreement has had a profound impact on the economies and societies of both countries. In this article, we`ll take a closer look at the history, impact, and current status of the Canada-US Free Trade Agreement.


The CUSFTA was signed in 1988 by then-Prime Minister Brian Mulroney and US President Ronald Reagan. The agreement aimed to reduce trade barriers between the two countries and create a level playing field for businesses on both sides of the border. It was the first free trade agreement between two developed countries and set a precedent for future agreements around the world.

In the years following the signing of the agreement, trade between Canada and the US increased dramatically. Prior to the agreement, the US was Canada`s largest trading partner, but the agreement solidified that relationship. Today, the US and Canada exchange over $1 billion in goods and services every single day.


The CUSFTA has had a significant impact on both the Canadian and American economies. In Canada, the agreement helped to create jobs by opening up access to the US market. Many Canadian businesses were able to expand and increase their profits by selling goods and services in the US. In the years following the agreement, Canada`s GDP increased by over 32%.

In the US, the agreement helped to reduce the cost of goods by increasing competition and providing access to cheaper Canadian products. Many American businesses also benefited from the agreement by being able to sell their products in Canada. In the years following the agreement, the US economy grew by over 25%.

However, the agreement did have some negative impacts as well. Some Canadian industries, such as the dairy industry, were hit hard by the agreement as they were unable to compete with American products. Additionally, some US industries, such as manufacturing, saw job losses as companies moved production to Canada where labour was cheaper.

Current Status

The CUSFTA was replaced by the North American Free Trade Agreement (NAFTA) in 1994. In 2018, the US, Canada, and Mexico began renegotiating NAFTA. After months of negotiations, the three countries reached an agreement in 2019 known as the United States-Mexico-Canada Agreement (USMCA).

The USMCA includes many of the same provisions as NAFTA, but with some updates and revisions. For example, the agreement includes new rules for digital trade and intellectual property, as well as updated labour and environmental standards.

While the agreement has been signed by all three countries, it has not yet been fully ratified. The Canadian government has introduced legislation to ratify the agreement, but the US Congress has yet to do so. Once all three countries have ratified the agreement, it will go into effect.


The Canada-US Free Trade Agreement was a landmark agreement that helped to solidify the economic relationship between Canada and the US. Its impact on both countries cannot be overstated, as it helped to create jobs, increase trade, and boost economic growth. While the agreement has since been replaced by the USMCA, its legacy lives on. As the world continues to become more interconnected, free trade agreements like the CUSFTA and its successors will remain essential for promoting economic growth and prosperity.