both the relationship between the two nations and
the ability of each country to compete in global mar-
kets. At the time, Canada and the United States were
among each other’s largest trading partners, and
boosting productivity, employment, and trade as a
whole became an important goal for both countries.
Talks began in the mid-1980’s between the Cana-
dian and the U.S. governments. In Canada, a com-
mission on trade recommended expanding rela-
tions with the United States, and by 1987, the U.S.
Congress gave President Ronald Reagan permission
to enter into a trade agreement with the Canadian
government. A finalized trade agreement was signed
by both nations and officially went into effect on Jan-
uary 1, 1989.
The express purpose of the agreement was to re-
move any barriers between the two nations to trade
in both goods and services, including the eventual
removal of all tariffs. Policies were put in place to fa-
cilitate fair competition within each nation’s territo-
ries and to liberalize conditions for investment. Pro-
cedures were also established to help settle any future
disputes that might arise between the two nations
as impartially as possible. Ultimately, both nations
hoped there would be an eventual growth and ex-
pansion of the agreement’s policies.
Impact The Canada-United States Free Trade Agree-
ment greatly increased the amount of trade between
the two nations. Opinions about the agreement var-
ied, as some employment sectors suffered losses and
others flourished. Overall, the investment of each na-
tion in the other increased. The agreement and the
question of sovereignty remained somewhat contro-
versial in Canada, but in the 1990’s, the Canadian gov-
ernment voted to extend many of the terms of the
free trade agreement to Mexico. This new agreement
involving all three nations was called the North Amer-
ican Free Trade Agreement (NAFTA).
Further Reading
Kreinin, Mordechai E., ed.Building a Partnership: The
Canada-United States Free Trade Agreement. East Lan-
sing: Michigan State University Press, 2000.
Siddiqui, Fakhari, ed.The Economic Impact and Impli-
cations of the Canada-U.S. Free Trade Agreement.
Queenston, Ont.: Edwin Mellon Press, 1991.
Smith, Murray G.Assessing the Canada-U.S. Free Trade
Agreement. Halifax, N.S.: Institute for Research on
Public Policy, 1987.
Jennifer L. Titanski
See also Business and the economy in Canada;
Business and the economy in the United States; Can-
ada and the United States; Foreign policy of Canada;
Foreign policy of the United States.Canadian Caper
The Event Joint Canadian-CIA operation that led
to the rescue of six U.S. diplomats from Iran
Date January 28, 1980
Place Tehran, IranAlmost three months into the Iranian hostage crisis, the
public learned that six members of the U.S. embassy’s staff
had not been captured with the others, when a secret opera-
tion to bring them home succeeded.On November 4, 1979, in the aftermath of the revo-
lution that drove the shah of Iran from power, a
group of Iranian students stormed the U.S. embassy
in Tehran and took a group of American diplomats
hostage. The entire embassy staff, however, was not
captured by the students. Six remained at large and
ultimately sought refuge at the Canadian embassy.
They were hidden for nearly three months in the
residences of the Canadian embassy’s staff, includ-
ing the home of Canada’s ambassador to Iran, Ken
Taylor.
Taylor quickly contacted Prime Minister Joe
Clark with the news of the hidden American diplo-
mats. Clark and his cabinet agreed with the ambassa-
dor’s decision to assist the Americans and assured
President Jimmy Carter that Ottawa would help
them leave Iran. The U.S. Central Intelligence
Agency (CIA) then designed and led an operation
to extract the Americans from Iran, although af-
terward the escape plan was portrayed as a solely Ca-
nadian effort. The cooperation of the Canadian
government was required, since it had to supply
fraudulent Canadian passports in the names of the
six Americans in hiding. The CIA provided forged
Iranian visas and, under the leadership of one of its
members, Antonio J. Mendez, designed a cover op-
eration that involved a fictional movie company
seeking to film in Iran. Mendez and another CIA
agent flew to Tehran, while the phony passports
were sent to Tehran in a Canadian diplomatic bag.
On January 28, 1980, the six Americans left Teh-
ran on a commercial airline without incident. Fear-
ing Iranian repercussions for their assistance, Ca-The Eighties in America Canadian Caper 183