Free Trade Agreement Mulroney

Free Trade Agreement Mulroney: A Closer Look

The Free Trade Agreement (FTA) is a milestone in Canada’s economic history. Signed by then-Prime Minister Brian Mulroney in 1988, the FTA eliminated barriers to trade between Canada and the United States, paving the way for the integrated North American market we know today. But what exactly is the FTA, and why is it significant?

History of the FTA

The FTA was the product of years of negotiations between Canada and the United States. Both countries recognized that their economies were closely intertwined, and that reducing trade barriers would benefit both nations. In 1987, the two sides signed the FTA, which came into effect on January 1, 1989.

The FTA was controversial at the time, with critics arguing that it would lead to job losses and a decline in Canadian sovereignty. However, supporters argued that the agreement would promote economic growth and increase competitiveness. Over time, the FTA proved to be a success, with trade between Canada and the US increasing dramatically in the years following its implementation.


The FTA paved the way for an even more comprehensive trade agreement between Canada, the US, and Mexico: the North American Free Trade Agreement (NAFTA). Signed in 1994, NAFTA built on the FTA by eliminating trade barriers between all three countries, and by addressing other issues like intellectual property and dispute resolution.

While NAFTA has been a subject of controversy in recent years, particularly in light of President Trump’s criticism of the agreement, it’s important to recognize the role that the FTA played in laying the groundwork for this historic trade deal.

Impact of the FTA

The FTA had a significant impact on Canada’s economy. By eliminating tariffs and other trade barriers, the agreement made it easier for Canadian businesses to sell their products in the US, and vice versa. This led to a surge in trade between the two countries, with total bilateral trade increasing from about $128 billion in 1988 to over $560 billion in 2015.

The FTA also helped to diversify Canada’s economy, as businesses were no longer as reliant on the Canadian market. This meant that the country was better equipped to weather economic downturns, as it had access to a larger market.


The Free Trade Agreement signed by Brian Mulroney in 1988 was a landmark moment in Canada’s economic history. By eliminating trade barriers between Canada and the US, the FTA paved the way for the integrated North American market we know today. While the agreement was controversial at the time, it proved to be a success, and helped to promote economic growth and diversification in Canada.