With all obstacles finally overcome, a U.S.-Canada agreement went into effect Sunday that ultimately will create a free trade zone extending from the Arctic Circle to the Rio Grande River.
The pact was agreed to reluctantly at first by the U.S. Congress and later almost scuttled by the Canadian Senate, forcing Prime Minister Brian Mulroney to call an election.But ultimately approved by Congress and Parliament, the agreement over the next 10 years will end tariffs between the two giant trading partners and pave the way for expanded cross-border financial investment and trade in energy and services.
And to settle alleged violations, a binational commission will be established, with its rulings binding.
Canada and the United States already form the world's biggest trading partnership, exchanging more than $150 billion in goods in 1988.
The pact will expand that even further, economists on both sides of the border say, although the United States, because of its size, is likely to be reap the most benefits.
Mulroney proposed the agreement to President Reagan in 1985, and Congress only narrowly gave Reagan the authority to negotiate an agreement.
Some Congressmen were angered over Canadian subsidies of exports to the United States and others saw no need for a free trade pact because most trade was already duty-free.
But after nearly two years of intense negotiations, here and in Ottawa, a draft was reached in late 1987, and was overwhelmingly approved this summer by Congress.
Canada's majority Conservative party approved the measure in the House of Commons, but the opposition Liberals blocked it in the Senate, where they held a majority, forcing Mulroney to call an election.
Opposition parties charged the agreement would make Canada subservient economically to the United States, in effect making it a 51st state.
But Mulroney was re-elected, and the Senate approved the pact last Friday.
Despite the importance both Mulroney and Reagan placed on the agreement, the move toward free trade went into effect without fanfare.
Reagan signed the final implementing documents Saturday while vacationing at the California White House.
Mulroney was out of the country Saturday, vacationing in Florida.
Canadian opposition parties and trade unions said they would monitor the agreement closely to see if it increased unemployment in Canada because of a surge in U.S. imports and if it did, to seek special aid for laid off workers.
In the United States, some Western states remain concerned about imports of subsidized Canadian redwood used for homebuilding as well as other subsidized Canadian exports.
U.S. Customs officials said tariff reductions would be phased in, although as of Sunday they would be dropped entirely on such tourist goods as fur garments, whiskey and rum, skis and skates.
Also as of Sunday, tariffs would fall by 20 percent on jewelry and some meats and musical instruments and by 10 percent on textiles, apparel, tires, wine and beer, and watches.