A decade has passed since the signing of the Canada–United States Free Trade Agreement (FTA);¹ the successor North American Free Trade Agreement (NAFTA) has been in effect since 1 January 1994. These two treaties were intended to create a more competitive economy in Canada through increased competition and open access to a larger export market. Canada was not alone in forming preferential trade agreements (PTAs). France, Italy, West Germany, and the Benelux established the European Economic Community (EEC), or Common Market, in 1957. One of its objectives was to form a common market within western Europe, which goal was...

The goal of this chapter is to review the debate about the effects of increased economic integration on a nationʹs capacity for independent choice of macroeconomic policy. I focus on Canada and the effects of increased economic integration with the United States and Mexico on its capacity for making macroeconomic policy. I also present data on the recent evolution of macroeconomic variables. While these data help explain the impact of greater economic integration, movements in these data may also reflect structural changes in the Canadian economy since 1988 that relate to technological changes and government policy choices.

First, I briefly...

Labour markets throughout North America are becoming more integrated. This integration applies both across borders and within domestic economies. It applies to the workplace practices of firms and their human resource policies and to the external labour markets that link up with the internal labour market of firms. Yet despite these integrating forces, persistent differences in workplace practices and labour market outcomes exist across jurisdictions. Furthermore, integration takes on different forms, including regional trading blocs that may depend less on national or provincial–state borders.

This chapter analyses the integration of external and internal labour markets in North America. In...

It has been suggested that recent international migration, especially from Canada to the United States, has affected the supply of skilled workers in key sectors of the Canadian economy.¹ Referred to as a ʹbrain drain,ʹ the exodus has been traced to many causes, and it has led to a range of proposals, from exit taxes (to recoup post-secondary education subsidies for the leavers) to major reductions in income tax rates to encourage them to stay. Since the public perceptions and policy discussions may have been based on rather scattered and disparate sources of information, this chapter draws together available evidence...

North American integration, or continentalism, has generally been considered as a threat to Canadian culture. The simple fact of living next to the United States, Canadaʹs giant neighbour, has proven a source of concern in terms of the viability of the Canadian polity. In such conditions, ʹfree trade is as much about identity politics as it is about economic relations between sovereign states.ʹ¹ For almost as long as Canadaʹs existence, there have been attempts to foster a genuinely national culture and identity in the face of pervasive U.S. influence. However, policies to protect and promote national culture and identity entail...

Regional integration in North America involves changes that are not purely economic, but also profoundly political.¹ While Canadaʹs close relationship with the U.S. economy is not new, its intensification under the Canada–U.S. Free Trade Agreement (FTA) of 1989 and the North American Free Trade Agreement (NAFTA) of 1994 has affected state–society relations in Canada, which in turn impinge on the democratic system of governance.² The political changes associated with regional integration have exacerbated existing problems in democratic representation and state–society relations. As the massive popular protests against trade talks in Seattle in 1999 and Washington, DC, in...

Ten years after the signing of the Canada–United States Free Trade Agreement (FTA), which, with the inclusion of Mexico, later became the North American Free Trade Agreement (NAFTA), other Latin American countries are hoping for hemispheric free trade.¹ What is the effect of this continental process on the capacity of governments to regulate their own social and economic development? Continental integration inevitably affects all levels of government in a federal state such as Canada, thus challenging the division of powers between the central and provincial governments. Is it compatible with the very principle of federalism? In other words, does...

In this age of international economic integration, a great deal of concern, both in popular and in academic discourse, has focused on the unrelenting forces of harmonization and the diminution of governmentsʹ capacity to choose policies in the pursuit of national aspirations. For Canada, a small, open economy overwhelmingly dependent on the worldʹs largest and most dynamic national economy, this anxiety is particularly acute. Indeed, concerns about ʹAmericanizationʹ have been a part of Canadian identity, politics, and public policy since before Confederation. Trade liberalization has intensified these fears. Many Canadians worry that they have forfeited – either through international agreement...

The preceding chapters in this volume provide detailed research findings from economics and political science about a number of significant aspects of North American integration and its implications for Canada. As the introductory chapter explained, the key questions involve what happens within each of the three spheres that we examined – economics, culture, and politics – but also the links between those spheres. This concluding chapter summarizes the findings of the research presented in this volume (as well as some related studies) and outlines a number of research priorities and policy recommendations.

North American integration is in large part an...