What Are the Benefits of Free Trade for Canada?

by Laura MacPhee; Updated September 26, 2017
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The North America Free Trade Agreement is a three-way agreement between Canada, the United States and Mexico. The treaty is one of the most far-reaching and powerful trade treaties in the world, impacting all three economies in significant ways. Benefits from the treaty are considerable for Canada.

What is NAFTA

The North America Free Trade Agreement was signed in January, 1994 between Canada, the United States and Mexico, with the final implementations completed in 2008. The Agreement forms one of the largest free trade zones in the world. The goal of the agreement is to eliminate any governmental barriers of trade between the three countries, such as payment and collection of tariffs. 441 million people live in the NAFTA region, 33.3 million of whom are Canadian. According to Canada's Foreign Affairs and International Trade site, one in five Canadian jobs is linked to international trade. The agreement has benefited Canada in several ways. An increase in trade with the United States and Mexico has boosted the Canadian economy. Trade with the United States is up 80 percent, and the amount of trade with Mexico has doubled.

Imports and Exports

A substantial increase in the number of Canadian exports, particularly in sectors such as cars, trucks and parts, has also been a huge benefit to Canada. This growth more than offsets any drop in export to international markets during times of financial crises. Imports to Canada from the United States and Mexico increased as well, particularly in communications equipment, as well as machinery and automotive equipment. An increase in trade between the three countries in agricultural goods benefit North American farmers, ranchers and consumers. The jobs created by increasing imports and exports are extremely beneficial to the Canadian job market.

Trade with Mexico

Prior to NAFTA, Canadian access to the Mexican market was limited. Today, because of the agreement, an expansion of Canadian firms into Mexico has taken place. This means an increase in revenue for many Canadian companies, particularly in previously highly restricted areas such as automotive parts. Today, Mexico constitutes Canada's 13th largest export market.

About the Author

Laura MacPhee has been writing and editing since 2009. Her experiemce ranges from editing aviation software articles for an Ottawa company, to writing on a myriad of topics for eastern Ontario's KnowBrockville, She has also penned eHow articles for Demand Studios. Schooled in Journalism at Humber College, she is completing her English degree at Queen's University.

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