Some Canadians believed that a comprehensive free trade agreement with the United States would irrevocably undermine Canada`s economic, cultural and political sovereignty. Some would argue that this has not been done, since Canada has continued to protect its cultural industries (as provided for in the agreement) and has an independent foreign policy towards nations like Cuba. Contributing to the harmonious development and expansion of world trade and creating a catalyst for broader international cooperation, and more importantly for Canada, it was to have secure and stable access to the huge and lucrative U.S. market without having to constantly fight against U.S. countervailing and anti-dumping duties – tariffs that were imposed on Canadian imports deemed unfairly subsidized by Canada. or, in one way or another, to offer unfair competition to U.S. industry (see protectionism). Canada wanted an agreement on subsidies to Canadian industry that would be duty-free. Canada also wanted U.S. government procurement to be open to Canadian companies and an effective and binding dispute settlement mechanism that does not rely exclusively on decisions in the United States. The United States and Mexico then announced their intention to pursue a trade and investment liberalization agreement. Canada has asked to be involved in the negotiations. As a result, NAFTA was signed and entered into force on January 1, 1994, creating a vast free trade area of about 370 million people.
It extended and replaced the Canada-U.S. agreement under which it was modelled. Over the next two decades, a number of academic economists studied the impact of a free trade agreement between the two countries. Several of them – Ronald Wonnacott and Paul Wonnacott, Richard G. Harris and David Cox – concluded that Canadian real GDP would increase significantly if the United States removed Canadian tariffs and other barriers to trade, and Canadian industry could therefore produce more efficiently. Other economists on the free trade side were John Whalley of the University of Western Ontario and Richard Lipsey of the C.D. Howe Institute.  The phenomenon of “cross-border shopping,” in which Canadians would take day trips to U.S. border towns to use duty-free goods and a high Canadian dollar, caused a mini boom for these cities.
The loss of many Canadian jobs, particularly in Ontario`s manufacturing sector during the recession of the early 1990s, was attributed (fairly or not) to the free trade agreement. The Liberal Party of Canada has traditionally supported free trade.  Free trade in natural products was a central theme of the 1911 Canadian legislative election. The Conservative Party ran an election campaign with anti-American rhetoric, and the Liberals lost the election. The issue of free trade did not reach this level of national celebrity in Canada for many decades. The growth of international trade has given rise to a complex and ever-increasing primary law, including international treaties and agreements, domestic legislation and jurisprudence on the settlement of trade disputes. . .