Free+trade+agreement

A free trade area (FTA) is a trade bloc whose member countries have signed a free trade agreement (FTA), which eliminates tariffs, import quotas, and preferences on most (if not all) goods and services traded between them. If people are also free to move between the countries, in addition to FTA, it would also be considered an Open Border. It can be considered the second stage of economic integration. Countries choose this kind of economic integration if their economical structures are complementary. If their economical structures are competitive, they are more likely to form a customs union.

In relation to the oil sand case study, Canada is a preferred provider of oil due to provisions in the agreement. these provisions in the contract state that once exports have been established, those exports are to be on an equal basis to that of Canadian domestic use. No such guarantees are offered to the united states through this type of agreement.

The most important thing to note about the NAFTA agreement in relation to the tars sands is that the amount of oil exported by Canada to the US, must be maintained into the foreseeable future until no oil is left to extract. Perhaps, Canada should look to seeing that provision lifted for fears of energy resource security.