Prime Minister Yosuhiro Nakasone`s visits to Washington and Ottawa in January 1986 made it clear that the Japanese were opposed to a political framework for the “North America Fortress” that would discriminate against third countries, particularly Japan. It is clear that the Japanese are aware of the underlying bilateral problems facing Canada and the United States, including the fact that such a significant portion of bilateral trade through corporate subsidiaries on both sides of the border, i.e. through multinational subsidiaries, and specific agreements in other areas such as the U.S. Auto-Canadian Compact. , NORAD and the Defence Sharing Agreement. U.S. President Ronald Reagan welcomed the Canadian initiative and the U.S. Congress gave the President the power to sign a free trade agreement with Canada, subject to congressional revision until October 5, 1987. In May 1986, Canadian and U.S. negotiators began developing a trade agreement. The Canadian team was led by former Deputy Finance Minister Simon Reisman and Peter O.

Murphy, former U.S. Deputy Trade Representative in Geneva. In January 2017, discussions were held on the renegotiation of NAFTA. The result was the development of a new NAFTA replacement agreement called the United States-Mexico-Canada Agreement (USMCA). The agreement aims to strengthen environmental and labour standards and promote domestic auto production in the United States, Mexico and Canada. What is remarkable is that it will also increase the duty-free for Canadians who purchase U.S. products online, from 20 to 150 $US. However, it has not yet entered into force and, until negotiations on this agreement are complete, its predecessor, NAFTA, will remain in place. 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 industry during the recession of the early 1990s, was attributed (fairly or not) to the free trade agreement.