Then, in 1994, Mexico joined the group through the North American Free Trade Agreement. Both of these agreements sparked a great deal of political controversy. And many Canadian companies were understandably anxious to avoid increased competition. As well, the Free Trade Agreement came into effect at a time when monetary policy was tight, to fight the high inflation rates of the day.
Despite initial misgivings, Canadian companies rose to the challenge of increased competition. Some of the sectors that we used to protect the most - such as furniture, clothing, and wine - have since established a strong presence in international markets. Overall, Canadian exports have flourished under these agreements.