Canada Us Free Trade Agreement Pros and Cons

The Canada-US Free Trade Agreement (CUSFTA) came into effect on January 1st, 1989, and has since been expanded upon with the implementation of the North American Free Trade Agreement (NAFTA) in 1994. The agreement seeks to promote economic growth, create jobs, and improve trade relations between the two countries. However, like any trade agreement, there are both pros and cons to consider.


1. Increased Trade: The free trade agreement provides businesses with greater access to each other`s markets and allows for the removal of trade barriers. This facilitates increased trade between the two countries, leading to economic growth and job creation.

2. Production Efficiency: With access to a wider range of markets, companies are more likely to specialize and produce goods more efficiently. This increased efficiency can lead to lower costs, which are then passed on to consumers in the form of lower prices.

3. Investment Opportunities: The agreement promotes foreign investment, which can stimulate the economy and create jobs. Canadian companies can invest in the US, and vice versa, with reduced barriers to entry.

4. Intellectual Property Protection: The agreement provides greater protection for intellectual property, encouraging innovation and the development of new technologies. This can create job opportunities and boost economic growth.


1. Job Losses: While the agreement may create jobs in some sectors, it also has the potential to lead to job losses in others. Industries that cannot compete with lower cost imports may be forced to close or downsize, resulting in job losses for Canadian workers.

2. Environmental Impact: Increased trade can lead to increased environmental impact, such as increased greenhouse gas emissions from increased transportation, and labour practices that may be damaging to the environment.

3. Loss of Sovereignty: Some critics argue that free trade agreements such as CUSFTA and NAFTA undermine Canadian sovereignty by giving foreign corporations power over how laws are developed and enforced in Canada.

4. Dependence on the US: The agreement creates a high level of dependence on the US market for Canadian businesses, leaving them vulnerable to changes in US trade policy or economic downturns.

In conclusion, the Canada-US Free Trade Agreement has its advantages and disadvantages. While it has the potential to stimulate economic growth, create jobs, and increase trade between the two countries, it also has the potential to negatively impact certain industries, lead to job losses, and increase environmental impact. As with any trade agreement, it`s important to consider the potential benefits and drawbacks before implementation.