Canadian economic growth and the Reciprocity Treaty of 1854

"The Reciprocity Treaty of 1854 is on the short-list of topics that continue to fascinate Canadian economic historians. A precursor of the 1989 Canada-United States Free Trade Agreement, the Treaty created a preferential free trade area in natural or primary products - such as wheat, oats, barley, timber, fish, and coal - that lasted just over 11 years (1855-1866) between the primary-product and export-based small open economy of the Province of Canada, now Ontario and Quebec, and four other much-smaller open economy Atlantic provinces of British North America (BNA) and the much larger, more protected, and less trade-based economy of the United States. Signed on June 5, 1854, the Treaty went into effect region-by-region as it was ratified by the legislatures in the 6 separate regions to which it applied, first in BNA between July and December in 1854 and then in the United States in March 1855 (Haynes 1892, p. 18). Negotiated skillfully by Lord Elgin, who had been appointed by the British government to act on behalf of BNA, the Treaty also settled a long-standing fisheries dispute, allowing American and British North American fishers to use each other’s coastal fisheries north of Florida within the 3 mile limit, ended export taxes on American timber sent down from Maine on New Brunswick’s Saint John river, and, finally, allowed American and British North American ships access to the waterways and canals of the Great Lakes and the St Lawrence without extra duties. The operation of the Treaty coincided with a period of great prosperity for pre-confederation Canada. Current dollar GNP grew at 7.3 percent a year in the 1850s, constant dollar GNP at between 3.5 and 4.6 percent a year (depending on the price index used to deflate current dollar GNP). Not until the turn of the twentieth century would Canada grow faster. How much of the economic growth of the Province of Canada, the largest and richest province of BNA, can justly be attributed to the operation of the Reciprocity Treaty of 1854?"