Canada's Trade example essay topic

Canada is a land of peace, freedom, and natural wealth. Since its very beginning, Canada has always been rather vigorously in international trade. For much Canada's early years, international trade strictly controlled by Canada's mother country, Great Britain. The British system of mercantilism was relatively beneficial to Canada and other British colonies. Mercantilism allowed all British colonies including Canada to purchase goods from fellow colonies, thus keeping the wealth within the British Empire. However, the system of mercantilism would eventually come to an end.

Britain realizing that she could save more money by trading with other countries, moved away from mercantilism. This was the beginning of Canada trading internationally without direct British control. Canada being a large country with a relatively small internal population quickly realized that being an export country would be the most sensible method for prosperity. The issue of how international trade would be conducted in Canada would wage on in the House of Commons for years. In the Federal election year of 1988, the Progressive Conservative government led by Brian Mulroney unveiled a solution to Canadian trade woes. This solution called for (at the time) the world's largest trade alliance between Canada, United States, and Mexico.

This alliance would ultimately become known as the North American Free Trade Agreement (NAFTA). To the Liberals led by John Turner, this agreement was a threat to Canadian sovereignty, and future prosperity of Canada. This essay will factually display the 1988 election, and will ultimately prove that Free Trade was an "overall" good movement for Canada. In the late 1980's, Canada was a developing first world country, which was still relatively new to most aspects of international trade and policy. In order for Canada to secure its long-term economic future, it was essential for Canada to guarantee itself a secure exporting market for its goods and services. This market that Canada was searching for was supposed to be reciprocal, in other words trade is free.

Canada had many different options during this period regarding its move towards free trade. Canada could have chosen to sign more explicit agreements with the World Trade Organization (WTO). This action would have allowed Canada to have a more international presence, and potentially extremely beneficial economic consequences. However, the main problem with committing to the WTO was the fact that no one country is liable to trade with you, rather it only gives you a larger market for potential exchanges. Canadian Prime Minister Brian Mulroney noticed these obvious flaws, and opted for a more selective free trade agreement with the United States. Brian Mulroney's plan called for Canada and the United States to guarantee each other markets for their products.

Both the PC and Liberal parties debating over free trade dominated the 1988 federal election. Liberal leader John Turner was strongly against the idea of Canada signing an agreement with the United States, especially without any public input. For the Liberals, they argued that this was the beginning of the end of the country of Canada. For under the agreement that would eventually become known as NAFTA, it was explicitly clear that virtually everything Canadian could be sold to the United States. In addition, Canada was required to sell a product to the United States at a set rate before selling it to other countries for a larger profit. John Turner had a viable reason to question the ideas of Brian Mulroney.

Throughout John Turner's campaign, he addressed many important issues regarding the Canada-United States Free Trade agreement. Firstly, Turner criticized the gradual reduction in control over the economic and social policies of Canada. By the implementation of NAFTA, Canada was giving up much of its own ideas in exchange for a compromise between their ideas and those of the United States. Turner believes strongly that by giving up these ideas, Canada would lose its identity and become the 51st state of the USA. Other issues that turner addressed to the Canadian public was the impacts on both farmers and fishermen, because of the way the Americans definition of subsidies. The United States wanted Canada to stop national aid towards its fishermen and farmers, because they believed that it gave them an unfair advantage over their own.

This issue was one that Brian Mulroney's government failed to deal with properly, for NAFTA for many fishermen and farmers has drastically affected their lives. Many maritime fishermen have switched their careers because it's just plainly not profitable since the implementation of NAFTA, for much of their trade was with European countries. Brian Mulroney countered most of John Turner's criticism with his own words of assurance. Mulroney from the beginning stated that there were going to be only positive effects with the ratification of NAFTA. Mulroney stressed that the creation of new jobs, and the guaranteeing of a market for Canadian goods could only cause Canada to prosper. The campaigns of both the Liberal and the PC were almost the exact opposites of one another.

John Turner ran a relatively good campaign, doubling the Liberal's seat total from the previous parliament to over 60 seats. However, Brian Mulroney's government still had a majority government, and on January 1st 1989, Brian Mulroney and George Bush Sr signed the FTA. Contrary to many of its initial critics, NAFTA, although not perfect has been relatively prosperous for Canada. The agreement has made both Canada and United States each other's largest trading partners. The trade between both Countries has continued to escalate every year since its implementation. In the year 1994 alone, trade between both Canada and the United Stated doubled from the previous year.

However, it's no secret that the Americans got a better deal than Canada, in the sense that NAFTA allows the United States to export its goods to countries that are both geographically and politically favourable. Canada's main success from NAFTA is that it has established itself as an exporting country. Canada's exports now account for approximately 40% of its GDP. Before NAFTA, exports accounted for only 25% of Canada's GDP. However, this statistic is somewhat misleading for Canada's trade is more concentrated with the United States than ever before, and less concentrated with the rest of the world. Canada's exports to the United States amount to 85% of the total.

These statistics are evidence that NAFTA serves its purpose in Canada to guarantee a market for Canadian goods and services. This is not the best position for Canada to be in both economically and politically. NAFTA has made Canada to put its eggs all in one basket so to speak. For much of its existence, NAFTA has been beneficial to Canada because of the strength of the United States economy.

This period for NAFTA will really test its validity because the US economy has slowed down drastically, and the European economy has become the more powerful currency. Brian Mulroney was right when he implemented the Free Trade Agreement. In all honesty, NAFTA is not perfect, but for the most part it works for Canada being an export country. Canada has gained much from free trade, but it has the potential to gain much more. The restructuring of NAFTA must and will take place for both parties to resolve disputes between them. In addition, Canada must increase its trade to other international markets besides the United States, because the best economy is a diverse one.