There Is More to Trade than Trade: An Analysis of the U.S./Canada Trade Agreement 1988.

The article analyzes the Free Trade Agreement signed by the U.S. and Canada on October 4, 1987. The author notes that freer trade leads to more competitive and efficient allocation of resources, whereas bilateral free trade favors the stronger economic unit. Canada has historically sought agreement with the U.S. through multilateral rather than bilateral negotiations because they offset disparities in negotiating power between Canada and its trading partners. The agreement was not considered one of free trade by Canada, who was unable to obtain secure access to the U.S. market and claimed that they had entered into the agreement under false pretenses. Canada was not allowed to invoke the General Agreement on Tariffs and Trade (GATT) due to a stipulation in their initial agreement. Canada's struggle to develop a Canadian cultural industry is discussed.