Have you heard of reciprocity agreements, but are you not sure how they work? The bank rate is explained. In the 1880s, a broad free trade agreement was advocated by Canadian businessmen. Erastus Wiman and Richard Cartwright were among the supporters. It has been described as a “trade union” or “total reciprocity.” However, these proposals were rejected in the 1891 Canadian election. This is due to protectionist and pro-British sentiments. In 1897, Sir Wilfrid Laurier, the Liberal Prime Minister, announced that there would be no more pilgrimages to Washington. The reciprocity movement began in earnest between 1846 and 1850. It has become an important theme in Canada West (present-day Ontario) and the maritime colonies, particularly New Brunswick. It was sparked by a dispute over the rights of American fishermen in the coastal waters of British North America (BNA). Both governments have been working to find a comprehensive settlement. Several theorists have distinguished between specific forms of reciprocity and “diffuse reciprocity” (Keohane 1986). While specific reciprocity is illustrated by international trade negotiations, as suggested above, diffuse reciprocity suggests a broader institutionalization of trust.
Through consistent cooperation within an international society, states are seen as building generally accepted standards of behaviour. These general standards exert their own normative pressures on state action and contribute to the development of long-term commitments between states that insist on cooperation. Therefore, in a diffuse reciprocity system, states should not seek the direct benefit guaranteed by specific reciprocity, but they can act with confidence in the long-term repayment of their cooperative actions. After Confederation, Canadians wanted to extend the reciprocity agreement with the United States. Political leaders John A. Macdonald, George Brown, Charles Tupper and others made pilgrimages to Washington, without success. A notable disappointment was Macdonald`s failure to include a high degree of reciprocity in the 1871 Washington Treaty. The treaty gave U.S.
fishermen access to the N.B.A.`s Atlantic inshore fishery. It also allowed BNA fishermen to fish U.S. coastal waters north of 36 degrees N latitude. The treaty introduced free trade with a considerable number of natural resources. Trade between the United States and the colonies increased sharply after 1854. However, factors other than the reciprocity agreement, such as the Canadian railway boom and the effects of the American Civil War (1861-1865), were largely responsible. The principle of reciprocity also governs extradition agreements. In international relations and treaties, the principle of reciprocity is the principle that favours, benefits or penalties granted by one state to citizens or corporations of another state are returned in kind.
A new and more comprehensive agreement was signed in 1938. It granted additional concessions to Canada to those in the 1935 agreement. However, the 1938 agreement was suspended in 1948 after the two countries signed the General Agreement on Tariffs and Trade (GATT).