owning provincial governments was less than the
price U.S. loggers had to pay to the private landown-
ers from whom they bought most of the trees they
logged. The coalition demanded that the U.S. gov-
ernment impose a “countervailing duty” to compen-
sate for this low initial cost paid by Canadian produc-
ers. This demand led to a special agreement in 1986
in which the United States “temporarily” imposed a
“countervailing duty” on Canadian softwood lum-
ber imports into the United States, but the issue con-
tinued to roil the Canadian-U.S. lumber trade in suc-
ceeding years, coming several times before the World
Trade Organization (WTO) for adjudication.
In agriculture, prices can be extremely volatile,
and it has long been the practice of both the Cana-
dian government and other governments in the de-
veloped world to subsidize their agriculture. During
the 1980’s, prices that had been sufficient to support
agricultural producers in the preceding years sank,
and many Canadian farmers complained. Canada’s
wheat, its most important agricultural product, con-
tinued to be marketed through the Canadian Wheat
Board, a government body. During the 1980’s, much
Canadian wheat went to Asia rather than to Europe,
its destination in prior decades.
Impact Canada began the 1980’s in a recession but
enjoyed in large part the economic recovery experi-
enced by many developed nations as the decade pro-
gressed. As with those other nations, however, the re-
covery was not evenly distributed, and some sectors
such as agriculture remained difficult, even as the
Canadian service economy mushroomed.
Subsequent Events The conclusion of the North
American Free Trade Agreement (NAFTA) in 1993
tied the Canadian economy even more closely to
that of the United States. At the same time, Canada’s
more generous provision of social services (espe-
cially health care) created tensions in Canadian-U.S.
relations.
Further Reading
Bothwell, Robert, Ian Drummond, and John En-
glish.Canada Since 1945.Rev. ed. Toronto: Uni-
versity of Toronto Press, 1989. The last chapter,
added in the revised edition, provides a compre-
hensive survey of the Canadian economy in the
1980’s.
Hessling, Melody, Michael Hewlett, and Tracy
Sommerville, eds.Canadian Natural Resource and
Environmental Policy: Political Economy and Public
Policy.Vancouver: University of British Columbia
Press, 2005. Provides an exhaustive account (to
date) of the softwood lumber issue.
Organization for Economic Cooperation and Devel-
opment.Economic Surveys: Canada.Paris: Author,
1989-1990. Survey of Canada’s economy at the
end of the decade. One of the annual surveys con-
ducted by the OECD of the economies of all its
member nations.
Statistics Canada.Canadian Economic Observer: Histor-
ical Statistical Supplement, 1989-90.Ottawa, Ont.:
Ministry of Supply & Services, 1990. Contains
many useful statistics on the 1980’s.
Nancy M. Gordon
See also Agriculture in Canada; Canada and the
Canada and the British Commonwealth
Agreement Canada-United States Free Trade
ment; Foreign policy of Canada; Mulroney, Brian;
National Energy Program (NEP).
Business and the economy in
the United States
Definition Structure and functioning of the
U.S. economy, including the production and
distribution of goods, services, and incomes
and related public policies
After a brief but painful recession (which helped lower infla-
tion and interest rates), the U.S. economy embarked on a
steady upswing of growth that brought prosperity to many
Americans.
Economic conditions were a major topic of contro-
versy during the U.S. presidential election campaign
of 1980. Ronald Reagan criticized President Jimmy
Carter for failing to deal effectively with inflation,
high interest rates, and unemployment. An eco-
nomic “discomfort index,” calculated by adding the
inflation rate to the unemployment rate, was widely
quoted. The index had risen from 13.4 in 1977
to 20.5 in 1980. Reagan’s decisive electoral victory
was a measure of the public’s discontent with the
economy.
During his campaign, Reagan had promised that
the rate of monetary creation would be slowed and
that this would help reduce inflation and interest
rates. President Carter had already appointed Paul
The Eighties in America Business and the economy in the United States 157
