Canada and the United States
The United States and Canada share a unique legal relationship. U.S. law looks northward with a mixture of optimism and cooperation, viewing Canada as an integral part of U.S. economic and environmental policy. The two nations' mutual, largely unguarded five-thousand-mile border does much to explain why: they are each other's largest trading partners, amassing $218 billion in trade in 1992; cross-border travel is easy; and they work together on common concerns about the quality of water and air. However, the relationship has not always been so cooperative. Although environmental treaties date to 1902, economic pacts have taken nearly a century to come to fruition. Traditionally, both countries warily put protectionism ahead of mutual interest, and they have retaliated in kind against tariffs, duties, and other barriers to free trade. Only in 1988 did the two enter into the U.S.-Canada Free Trade Agreement (FTA) (Pub. L. No. 100-449, 102 Stat. 1851), a groundbreaking pact designed to eliminate these barriers. It paved the way for the historic North American Free Trade Agreement (NAFTA) in 1993.
Early relations between the two countries were rocky. In the mid-nineteenth century, trade foundered on stubborn protectionist policies; each country feared the economic success of the other at its own expense. The 1854 Elgin-Marcy Reciprocity Treaty (10 Stat. 1089) was intended to open up trade on natural resources but it barely lasted a decade. Its failure prompted Canada to spend fruitless years trying to loosen U.S. trade restrictions before formulating, in 1879, a national policy of high tariffs by which it hoped to force the United States back to the negotiating table. But the table remained empty for nearly a century. The only trade agreement between the two nations was the General Agreement on Tariffs and Trade (GATT), a one-hundred-nation agreement first promulgated in 1947. The generality of the GATT accords did little to address the specific issues facing these two trading partners and it caused Canada, in particular, frustration. But U.S. prosperity throughout the mid-twentieth century meant it could afford to ignore Canadian overtures.
The two were more willing to negotiate on environmental concerns. The landmark agreement in this area is the Boundary Waters Treaty of 1909. It established the International Joint Commission (IJC) to deal with the issues of water resource management, a set of concerns referred to as transboundary issues because of the two nations' common border. Made up of technical specialists from various federal, state, and provincial governments of the United States and Canada, the IJC has authority to approve joint projects and to investigate complaints. Since the 1970s its duties have expanded as the result of the Great Lakes Water Quality Agreements which established goals for restoring the damaged ecosystem of the Great Lakes. Contemporary concerns facing the IJC include water levels, pollution, acid rain, and climate changes, with a growing emphasis on the use and maintenance of river systems. Critics generally agree that the success and innovation of this commission represent a model for international cooperation.
Despite progressive solutions to environmental problems, it took the United States and Canada until the late 1980s to forge better economic ties. The slow progress toward open trade was due to mutual suspicions, greed, and a long history of retaliatory actions. This hindrance stood in stark contrast to the countries' cultural similarities and cooperation in other areas. They had been allies in both world wars and both remained key members of the North Atlantic Treaty Organization (NATO). But war is an unusual experience; military allies can still be less than friends in trade. Then, the last half of the twentieth century unexpectedly changed everything — domestic industrial decline, brought on by a rise in international competition, toppled the United States from a position of preeminence and made Canada more important to its plans for long-range prosperity. Canada underwent a great change in its historically isolationist outlook as it too suffered economically. The 1984 election of a conservative Canadian government led by Prime Minister Brian Mulroney was a watershed event. Mulroney's victory was based on promises of opening U.S. markets to Canadian business. Both sides wanted to remove the barriers of high tariffs, antidumping fees, and countervailing duties (forms of protectionism that limited the expansion of each nation's markets) in order to create new jobs and wealth.
On January 2, 1988, negotiations between the administrations of President Ronald Reagan and Prime Minister Mulroney resulted in the signing of the FTA. In succeeding where previous generations had failed or not even tried, Reagan declared that the FTA would remove an "invisible barrier of economic suspicion and fear." The pact had five broad goals: (1) eliminate barriers to trade in goods and services, (2) improve fair competition, (3) liberalize investment conditions, (4) establish procedures for a joint administration of the agreement, and (5) lay the foundation for future cooperation. The FTA also relaxed U.S. immigration rules for Canadians, allowing freer travel across the border for businesspersons.
On the administrative level it created a temporary body for resolving disputes, the binational Extraordinary Challenge Committee, which was given a seven-year commission to hear appeals. Not surprisingly, this issue had been the most troublesome during the negotiations preceding the FTA; it proved slightly problematic in practice, too, with the United States generally losing its complaints. Nonetheless, the FTA was seen as a boon for U.S. business as a whole, removing Canadian restrictions that had long been a sore point, and emphasizing the resolution of disputes outside of courtrooms.
The FTA's success laid the groundwork for an even more ambitious trade agreement between the United States, Canada, and Mexico. This was the much-anticipated NAFTA, enacted in 1993. NAFTA's changes were to be phased in over fifteen years, and its purpose is to liberalize trade between the three countries in hopes of emulating the economic cooperation long enjoyed by European nations. In practice, its broad aims have proved highly controversial.
Through the many years spent working out its bugs, the U.S.-Canadian legal relationship has taken great strides away from its early guardedness. Environmental rather than economic cooperation proved easier at first, but the changing forces of international competition ultimately forced the two border nations to the bargaining table. Today, trade is almost unfettered, and the countries are probably destined to remain each other's most important trading partners, relying on each other to provide materials, goods, and services. Future willingness to deal will hinge on many variables, not the least of which is the success or failure of NAFTA in an increasingly competitive world.
