titive devaluation of currencies and increasingprotectionism, as countries tried to export unemployment with so-called"begger thy neighbour" policies. Perhaps the severity of the depression was passing by 1939, but it wasthe Second World War that brought a return to prosperity in North America.It brought devastation to Europe and Japan. After the War Following the War there was a concerted effort, through the InternationalMonetary Fund, the World Bank, and the GATT,to prevent the disorderly economic nationalism of the Nineteen Thirties.But, more importantly, the Cold War set in. North America, havingemerged from the War industrially intact, found itself facing great demandfor its goods. The United States was wealthy enough to lend themoney needed to buy them. [This was the source of "Euro dollars"]The U.S.'s consequent great expansion required even more natural resources that its great expanse held. It developednew sources in Canada, Latin America, and the Middle East. In thishowever, the politics of the Cold War had as much influence as merely economic concerns. It has to be noted here that the GATT was successful in reducing tariffsaround the world, remarkably successful. By the time of the Canada-United States Free Trade Agreement in the late 1980s, fully 80% of theformal tariff barriers to trade between the two countries had beenremoved. However, the reduction in tariffs was accompanied by a global proliferation of non-tariffbarriers: quotas, voluntary export restraints, safety regulationsgovernment procurment quotas, labour regulations, content regulationssubsidies and financial supports in the form of unemployment, housingand social policies. Out of this "New Mercantilism" emerged the United States - Canada Free Trade Agreement. For Canada the period was marked by a resource boom, and an increase in U.S. ownership of Canadian industry. Manufactured exports to the U.S.increased, particularly by way of the 1950s "Auto Pact", which g...
