Canadian-American Reciprocity Treaty

The Canadian–American Reciprocity Treaty of 1854, also known as the Elgin-Marcy Treaty, was a trade treaty between the United Kingdom and the United States, applying to British possessions in North America including the Province of Canada, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland Colony. It covered raw materials and was in effect from 1854 to 1865. It represented a move toward free trade and so was opposed by protectionist elements in the United States. After the conclusion of the American Civil War, the protectionist elements were joined by Americans angry at alleged British collaboration with the Confederate States of America during the war, and the alliance was successful in terminating the treaty in 1866. The response in much of British North America was to form the Dominion of Canada (1867), which was expected to both open up many new economic opportunities inside Canada and unify the colonies against growing expansionist sentiments in the United States, associated with the Alaska Purchase. Attempts by the Liberal Party of Canada to revive free trade in 1911 led to a political victory for the Conservative Party, which warned that Canada would be annexed by the Americans. Talk of reciprocity was ended for decades.

Faced with the ending of British imperial preference when the British Corn Laws (tariffs on food imported to Britain) were repealed in 1846, the Canadian business community, based in Montreal, looked south. Merchants threatened to push for annexation to the United States unless London negotiated a free trade deal with Washington. In 1854, they achieved what they wanted in the Elgin-Marcy Treaty. It listed most Canadian raw materials and agricultural produce, especially timber and wheat, as goods admitted duty-free to the U.S. market. The treaty ended the American 21% tariff on natural resource imports. In exchange, the Americans were given fishing rights off the East Coast. The treaty also granted a few navigation rights to each other's lakes and rivers.

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