The Canadian economy is determined largely by the United States economy threw the North American Free Trade Agreement (NAFTA) and the Free Trade Agreement (FTA). The North American Free Trade Agreement was an agreement that came into effect on January 1,1995 which involves Mexico, Canada and the United States of America. This agreement is said to produce 1 billion to 3 billion dollar gains in each country. NAFTA ensures that a certain amount of goods produced and traded between the three countries has to have a minimum percentage of its parts produced in North America.

             The Free Trade agreement is between the United States and Canada. The Free trade agreement came into effect in 1989 even though three fourths of trade between Canada and the United States was already free. This agreement to Canada is huge because it set up a free trade zone between the U.S and Canada, which is the largest free trade zone in the world. The Free Trade agreement is huge to Canada because 20 per cent of Canada"s GDP comes from exports to the United States. This agreement eliminated "all trade restrictions such as tariffs, quotas, and non tariff barriers." The Canadian economy gains access to the U.S economy that is ten times its size. While the U.S economy will gain the lower-priced Canadian goods.

             These two agreements show how much the Canadian economy relies on the United States economy and threw these two agreements the Canadian producers can export and import U.S goods easily and at an affordable and profitable price. In this paper I will show you how the FTA and the NAFTA help the Canadian economy export and import into the U.S economy and will show you how much the Canadian economy needs the American economy to do business.

             Why are the FTA and the NAFTA important to Canada? Considering that the United States is Canada"s most important country to trade with it only seems logical that the Canadian economy would benefit from free trade that the FTA and the NAFTA give them.