Canada-US Trade An Economic Overview

finest trading partner of others. The United States and Canada have more bilateral trade than any other foreign trading relationship. We are about to see an increase in this transaction. Prime Minister Brian Mulroney and President Ronald Reagan signed the Canada-U.S. Free commerce Agreement on January 2, 1988, which will further liberalize commerce between the two biggest trading partners in the world. This Comment explores the contents and exclusions of the Free Trade Agreement (FTA). This Comment also lists potential roadblocks to the Agreement's implementation, such as Canadian trade attitudes, provincial power, and the political system. In conclusion, this Comment examines a number of upcoming issues and offers possible futures for the Free Trade Agreement's ties.

There are twenty-one sections and eight sections in the Agreement.

sections. The first part gives definitions for words used in the FTA and outlines the goals and parameters of the Agreement. The goal of the Agreement is to create a free trade area between the United States and Canada that complies with GATT regulations. In particular, the Agreement seeks to: 1) remove trade barriers for goods and services between the two nations; 2) promote fair competition; 3) liberalize investment conditions; 4) create efficient processes for enforcing the Agreement and settling disputes; and 5) establish the groundwork for future bilateral and multilateral cooperation.4

Trade in goods is covered under the Agreement's second section.

All tariffs between the United States and Canada are eliminated in Chapter 3, with the exception of import duties from other nations. The Agreement offers instructions to ascertain the provenance of items sent in order to achieve this purpose. Chapter Four deals with duties, customs, and tariffs. In particular, Chapter 4's tariff reduction requirements stipulate that tariffs on "import-sensitive goods" must be lowered within 10 years, on a few other specified goods within five years, and immediately on a third category of goods.Beginning in 1990, customs fees will be lowered; after that point, no more customs user fees will be accepted.7. Both parties to the agreement will not begin.

The marketing of agricultural products is somewhat liberalized in Chapter Seven of Part One, despite the fact that all obstacles are still there.1s Chapter Eight mandates the immediate removal of tariffs on whiskey and rum and permits each nation to control alcoholic beverages; duties on wine, beer, and other distilled spirits will be

What's Left Out of the Free Trade Agreement gone in ten years.1 8 Energy imports and exports, including those of petroleum, natural gas, coal, electricity, uranium, and other nuclear fuels, are covered in chapter nine." A certain amount of trade liberalization for automotive items is provided under Chapter 10. But the Auto-Pact is essentially all that the FTA does."

In accordance with the fundamental principles of the General Agreement on Tariffs and Trade (GATT), the two nations may, in an emergency, temporarily suspend imports in order to prevent or treat serious harm.

The Agreement includes clauses that allow businesses and employees in both nations to receive relief from job losses and other import-related

Intellectual property, the car industry, and the Canadian cultural sectors are not included in the FTA. Canada's robust national strategy of subsidization has resulted in the exclusion of the cultural industries. Similarly, the auto industry has been largely left out since the Auto-Pact effectively reduced tariffs and other trade obstacles. However, some segments of the American and Canadian auto industry have voiced concerns that the FTA could do more to balance trade in automobiles between the two nations."3.

Most likely because to negotiating challenges, the intellectual property sector has been mainly left out of the FTA.

Particularly noteworthy is the bilateral adjudication panel.

FREE TRADE CONTRACT

The bilateral panel of adjudication, which is mentioned in section six, chapters eighteen and nineteen of the Free Trade Agreement, is one of the most innovative features of the agreement. Two delegates from each nation will make up the bilateral panel, and they will be picked from a roster kept in each nation.The remaining four members will select the fifth person, who will serve as chairperson, either collectively or by drawing lots.

The panel will only hear arguments from both parties in the event that prior dispute resolution procedures are unsuccessful.39 The panel will be able to consider cases involving general disagreements as well as disputes pertaining to the antidumping (AD) 40 or countervailing duty (CVD) 41 laws of either nation. 42 The panel will render a decision.

minations depending on national administrative choices.

In addition, the panel will evaluate decisions using the same standard of review as domestic courts, evaluating whether the administrative agency correctly implemented the national AD/CVD law."This binational panel represents a first for international trade between the United States and its trading partners," the statement reads, despite some pushback from the US to the group's existence. Nevertheless, Canada has insisted on having panel 6 included because it views the American AD/CVD laws and processes as repressive and discriminatory.

Congress has debated issues related to the panel procedure. This discussion focuses on the constitutionality of the panel." Regarding the panel, there are three questions: 1) does the FTA violate the Appointments Clause of the United States Constitution; 2) does the FTA lack the guarantees necessary to guarantee judicial power under article III of the Constitution; and 3) could the FTA's failure to provide for judicial review of the panel's decisions amount to a denial of due process?49 The constitutional clause that gives Congress the authority to establish courts with appellate jurisdiction serves as the cornerstone of congressional agreement.