NAFTA: 30 years later, Canada still on the lookout for the United States

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NAFTA: 30 years later, Canada still on the lookout for the United States

The Ambassador Bridge, between Canada and the United States, is one of the most important cross-border links in North America. Trade has increased since the entry into force of NAFTA.

Thirty years to the day after the signing of NAFTA, the North American Free Trade Agreement continues to leave its mark on the Canadian economy and on Ottawa's relationship with its main trading partner, directly south of the 49th parallel.

In an interview on RDI, Richard Ouellet, professor of international economic law at Laval University, recalled that NAFTA was a fundamental agreement for North American economic integration.

At the time, this created the largest economic free trade area in the world; today, the three trading partners of Mexico, the United States and Canada account for around a quarter of the world's gross domestic product [GDP], the specialist added.

Yet when the agreement was signed on December 17, 1992, both Ottawa and Washington and Mexico City had doubts about the NAFTA clauses.

In Mexico, there were so-called Zapatista mobilizations [named after one of the main actors in the Mexican revolution, in 1910, editor’s note] for the protection of the territory, recalled Mr. Ouellet.

In the United States, the agreement was signed by George H. Bush, who had just lost the presidency the previous month and whose successor, Bill Clinton, wanted to negotiate side agreements concerning the protection of the environment and workers' rights, mentioned the professor again.

It was only in Canada that the agreement would have passed more like a letter in the mail, even if the prime minister at the time, Jean Chrétien, also wanted to renegotiate certain provisions.

Since then, the Canadian economy has benefited greatly from this agreement, mainly in terms of its economic relationship with the United States. Canada's only land partner, the country of Uncle Sam is also the destination of 75% of Canadian exports, which makes Washington the main trading partner of Ottawa. And Canada is the second largest market for American companies, noted Richard Ouellet.

However, this close economic relationship has its drawbacks: there is no need to mention the many disputes over lumber, for example.

“You have to constantly be on the lookout with the American partner. Canada is never immune to tension created by Congress or even by the presidential administration.

— Richard Ouellet, professor of international economic law at Université Laval

However, the Canadian economy has more than one trick in its bag: over the years, Ottawa has signed other free trade agreements, whether with Europe or with countries in Asia, in order to diversify its trade.

We have not yet reached the degree of diversification we would like, but Canada is still doing very well, assured Mr. Ouellet.

Besides, should we still talk about NAFTA? After all, the same three trading partners ratified the Canada-United States-Mexico Economic Agreement (CAMEA) in 2020.

Yet Mr. Ouellet believes that the differences between this new agreement and the one it replaced are minor.

We count two main changes: first, the question of the rules of origin of products, particularly in automobile manufacturing, which further closes the North American bubble in on itself. Then, the AÉCUM is now renegotiable every six years, with a maximum buffer period of ten years, the professor explained.

If the disagreements on the timber The work still exist, in 2026, so this will be an opportunity to try to resolve the issue. Again.

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