Canadian-American Reciprocity Treaty The Canadian-American Reciprocity Treaty was a trade treaty between the colonies of British North America and the United States. It covered raw materials and was in effect from 1855 to 1866. Origins After Britain moved to free trade and repealed the Corn Laws the Canadas had to search for new sources for their exports, especially of wheat and timber. The treaty was negotiated by the British on behalf of the Canadians. In 1854 the Americans agreed to eliminate 21% tariff on natural resource imports. In exchange the Americans were given fishing rights off the east coast. The treaty also granted navigation rights to each others lakes and rivers to the two nations. Effects In Canada there has long been a dispute as the effects of the treaty. The period after the treaty's introduction saw a large increase in Canada's exports to the United States, and a rapid growth of the Canadian economy, especially in what would be southern Ontario. For decades afterwards Canadian economists saw the reciprocity era as a halcyon period for the Canadian economy. Canadian exports to the United States grew by 33% after the treaty, while Americans exports only grew by 7%. Ten years later trade had doubled between the two countries. After the Second World War this view was challenged, especially by L.H. Officer and L.B. Smith, both University of Toronto economic historians. They argued that the growth of trade was caused by the introduction of railways to Canada and by the Civil War leading to huge demand in the United States. They also argue the statistics are questionable. Before the tariffs much smuggling took place. Free trade brought this trade into the open, but did not actually grow the economy. 1855 saw a poor wheat harvest in the United States and the United Kingdom. It also saw Russian wheat supplies cut off by the Crimean War. This lead to a great year for Canadian wheat independent of the introduction of the tariff. It was also argued that the trade hurt Canadian manufacturing. For instance the export of milk and barley hurt the Canadian cheese and beer trades. End The treaty was ended by the Americans in 1866 because they felt that Canada was the only nation benefiting from it and because they objected to the protective Cayley-Galt Tariff imposed by Canada on manufactured goods. This worried Canada and was an important impetus to Confederation in 1867. While the new country attempted to have a return to reciprocity, the Americans would not agree. Eventually John A. Macdonald set up a Canadian system of tariffs known as the National Policy. In 1911 an agreement between Wilfrid Laurier's Liberals and the Americans was rejected by the electorate in the 1911 election. Both nations joined GATT after the Second World War and tariffs began to steadily decline. Free trade between the two nations did not again come into being until the 1988 Canadian-American Free Trade Agreement, brought in by Brian Mulroney's Conservatives. u suck FAVORITE ARTICLES: History of the World    History of the United States    History of Europe    Ancient History    History    Military History    World War I    Bombing of Dresden    California    US Constitution    Frank Sinatra    Boston    Marbury v. Madison This article is licensed under the GNU Free Documentation License at http://www.gnu.org/copyleft/fdl.html You may copy and modify it as long as the entire work (including additions) remains under this license. You must provide a link to http://www.gnu.org/copyleft/fdl.html To view or edit this article at Wikipedia go to http://www.wikipedia.org/wiki/Canadian-American_Reciprocity_Treaty