Free Trade Agreements Are These Really Working?


by Aldert van Nieuwkoop


Photo: blog.cleveland.com


Free Trade at work. Canada is regularly described as


a trading nation as its total trade is worth more than two-thirds of its Gross Domestic Product (GDP). Of that total, roughly 75% is done with countries, which are part of free trade agreements with Canada. A Free Trade Agreement (FTA)


is there to (theoretically) enable competition on a more even play- ing field with local firms in the FTA partner country. Under a FTA, a range of Canadian goods and ser- vices benefit from the reduction or elimination of tariff and non-tariff


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barriers to trade, such as quotas or technical barriers. It is important to note that each FTA covers different industry sectors and contains differ- ent provisions, depending on the FTA partner. For example, some of Canada’s more recent FTAs go be- yond “traditional” trade barriers to cover business practices in labour mobility, intellectual property and investment. Canada has free trade agree-


ments in force with more than 10 countries, which provide a competi- tive advantage across a wide range


of sectors. In addition, Canada has begun negotiations with more than 60 countries, including some of the world’s key markets.


The question is, are they working….? The oldest currently in effect FTA


Canada has is the Canada U.S. Free Trade Agreement, which was signed in 1987. Key elements of the agree- ment included the elimination of tariffs, the reduction of many non- tariff barriers, and it was among the first trade agreements to address


April 2014


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