Growth+of+Free+Trade

=**Growth of Free Trade Agreement**=

What is free trade?
An international trade system existing without tariffs, quotas or any other restrictions.

**What are Free Trade agreements?**
Free trade agreements are agreements that promote commerce among countries by removing barriers to investment, the movement of technology, and trade such as quotas and tariffs.

Originally, leaders believed the role of government was to manage the economy and ensure employment. It was believed that high tariffs were necessary to protect local industries.

The beginning of Free Trade agreements occurred during the 1990’s with an increase in the belief of free market economies being effective. Agreements were created to eliminate the tariffs and other trading restrictions.

=Key Words=

NAFTA-NorthAmerican Free Trade Agreement

http://www.naftanow.org/

WTO- World Trade Organization – an international organization with representatives from many countries that is responsible for managing

http://www.wto.org/english/forums_e/students_e/students_e.htm

=**Positives & Negatives**=

__Supporters__ Believe Free trade agreements promote greater worldwide economic growth and prosperity and that barriers to investment and the technology movement disappear.

__Opposing__ Those who oppose Free Trade have fears that there will be a loss in national sovereignty, unable to protect and maintain culture, environment

__According to WTO__ WTO: The 10 misunderstandings 1. The WTO dictates policy 2. The WTO is for free trade at any cost 3. Commercial interests take priority over development ... 4. ... and over the environment 5. ... and over health and safety 6. The WTO destroys jobs, worsens poverty 7. Small countries are powerless in the WTO 8. The WTO is the tool of powerful lobbies 9. Weaker countries are forced to join the WTO 10. The WTO is undemocratic

WTO: The 10 benefits 1. The system helps promote peace 2. Disputes are handled constructively 3. Rules make life easier for all 4. Freer trade cuts the costs of living 5. It provides more choice of products and qualities 6. Trade raises incomes 7. Trade stimulates economic growth 8. The basic principles make life more efficient 9. Governments are shielded from lobbying 10. The system encourages good government

=**Free trade and Canada**=

• From 1854 to 1866 existed a limited free trade agreement with the U.S • In 1878, Sir John A. Macdonald by election became the first Prime minister based on his National Policy • National Policy was created to protect Canadian manufacturing from competition • Through the early 1900’s Canadians were not comfortable with Free trade with U.S • The Auto Pact signed in 1965 began movement towards free trade- Sectoral Free Trade (involves only one part of the economy) • The Auto Pact allowed vehicles models to be made for the U.S and Canada • In 1988 Free Trade Agreement (FTA) with the U.S was created • Mulroney believed Canadians would gain access to the U.S market. • Reagan believed free trade will give Americans the freedom to invest in Canada and gain access to Canadian resources and markets. • In 1994 The FTA was extended to include Mexico creating the North American Free Trade Agreement (NAFTA)

=**How It Affects Our Country**=

• Trading with Mexico presents pros and cons o Mexico is becoming wealthier and has a population over 100 Million attracting Canadian Businesses o Canada may lose jobs to Mexico due to lower wages

• Benefited from auto pact significant increase in Auto production because of high quality and lower wages than U.S • Competition with U.S decreased spending on social institutions (education and health care)

WTO- World Trade Organization – an international organization with representatives from many countries that is responsible for managing

http://www.wto.org/english/forums_e/students_e/students_e.htm

References:

http://www.wto.org/english/forums_e/students_e/students_e.htm

http://www.naftanow.org/

http://www.epi.org/publications/entry/briefingpapers_bp147/

Webster Dictionary

http://archives.cbc.ca/economy_business/trade_agreements/topics/536/

http://onlinebookshop.wto.org/shop/article_details.asp?Id_Article=303

http://onlinebookshop.wto.org/shop/article_details.asp?Id_Article=302