Canadian-American Reciprocity Treaty

The treaty is also known as the Elgin-Marcy Treaty and it was in effect between 1854 until 1866. It was sign by the leaders of colonies of British North American and the President of the United States of America.

The repeal of the protectionist policy the Corn Laws(1815-1846) was result of Great Britain moving to a more free trade market and with the Corn Laws repealed, there was a movement from merchants for USA to annex BNA unless London agree negotiated a free trade deal with Washington.

So on 1854, BNA and USA reached an agreement, USA agree to eliminate 21% tariff on natural resource imports and USA will received fishing rights off the east coast. Another term was that both nations were allow navigation each over lakes and rivers.

The effects the treaty had on the Canadian economy had been debated. While there was large increase in Canada's exports to the United States and the Canadian's economy experiences rapid growth. Canadian economist saw the reciprocity era as an undisturbed period for the economy. Since Canadian exports increase by 33% while USA's exports grew by 7% a decade later these number will double.

However, this view has been challenged by economic historian L.H. Officer and L.B. Smith. They claimed that the growth was caused by the newly built railroads and since the Civil war was going on there was a large demand for Canadian goods and they argued that the statistics are unreliable. Before signing of the treaty, there was a large amount of smuggling and free trade reveled the smugglers operations. But there is no strong causality between the signing of the treaty and growth in the economy. Another point of view that the treaty hurt Canadian manufacturing industry, an example of this would be the exports of milk and barley which hurt Canadian cheese and beer.

However due to British support for the CSA many Americans joined with the Republicans to posters the signing of the treaty and this led