The end of the Cold War in the late 1980s and early 1990s led to major political and economic changes in Canada. Politically, Mikhail Gorbachev's reforms of glasnost and perestroika weakened the Soviet Union and led to the fall of communist states. This ended the Cold War. Economically, Canada moved towards globalization by signing free trade agreements like the FTA with the US in 1989 and NAFTA in 1992, reducing tariffs and attracting more investment. While free trade grew the economy, it also increased Canada's economic dependence on the US. In response, Canada sought to diversify trade through partnerships in Asia and Latin America in the 1990s.

1. THE 80’S AND 90’S: A NEW
WORLD ORDER
The End of the Cold War & Economic Change in Canada

2. Politics: The End of the Cold War
Détente
In the 1970’s the Cold War seemed to
“cool down” & the USA and USSR
showed willingness to cooperate with
each other
They signed a series of nuclear weapons
treaties
The USA pulled out of Vietnam 1973
The USA even restored diplomatic
relations with Communist China during
a period called “Ping Pong Diplomacy”
(no joke)

3. Politics: The End of the Cold War
The Cold War “Heats Up”
AgainRonald Reagan was elected in 1981 and
immediately began to re-start the arms
race
The key to defeating the Soviet
Union, he thought, was to bankrupt
them
Strategic Defence Initiative (SDI,
aka. “Star Wars”): A missile
defence program that would
essentially weaponize space

4. Politics: The End of the Cold War
The Soviets in Afghanistan: 1979-1989
The Soviets occupied Afghanistan in the 1980’s in
order to “help” the Soviet-friendly government
there
This was a Soviet attempt to extend their
“Sphere of Influence”
They fought against guerilla forces called the
mujahedeen (which the USA supplied with
weapons and $$$). Osama Bin Laden was an
important leader within the mujahedeen.
The Afghanistan campaign ended up becoming a
type of Vietnam War for the USSR; they couldn’t
win over the local population, and the war became
incredibly unpopular at home

6. Politics: The End of the Cold War
Mikhail Gorbachev
By the mid-1980’s, Mikhail Gorbachev comes
to power and begins to institute reform in the
USSR
GLASNOST: “Openness”. Soviet citizens could
now criticize the government and express
alternate political views. Essentially, they allow
freedom of the press and freedom of speech
PERESTROIKA: “Restructuring”. This was
Gorbachev’s economic reform, which allowed
for some private property and more small
private businesses

7. Politics: The End of the Cold War
The Fall of the Satellite States
By the late 1980’s, independence
movements in Eastern Europe had
gained momentum
Lech Walesa, an electrician, led Poland
to independence and became their new
President
Vaclav Havel led Czechoslovakia to
independence
And in 1989 the Berlin Wall fell. West
and East Germans were now united after
almost fifty years of being separate. This
was the symbolic end to the Cold War

8. Politics: The End of the Cold War
The Collapse of the USSR
While some hardliners still existed in the
Soviet government, the Party essentially
collapsed in on itself from the economic
and political pressures.
On Christmas day 1991, the Soviet Union
effectively broke up, separating Russia
with the other republics
Ultimately, Communism could not
provide the basic necessities that people
needed and people wanted the goods
that capitalism provided.

9. The Economy: Steps Toward Globalization
1980’s Canada: The Mulroney Era
Like Reagan, Brian Mulroney was a neo-
conservative and believed in low
corporate taxes and market deregulation
1985 – Mulroney scraps FIRA. It is
renamed and its scope drastically reduced
1989 – Free Trade Agreement with the
USA (FTA)
1992 – expands the FTA to Mexico to
create the North American Free Trade
Agreement (NAFTA). Canada is still a
part of this trade agreement today.

10. For Against
 No Tariffs = Canada attracts more US
investment and our economy grows
 No Tariffs = branch plants would move
back to USA = many jobs would be lost
 Free trade = access to the huge
American market, meaning more
demand
 Canadian companies can’t compete with
giant US companies that would flood the
market with cheaper priced goods
 FTA would attract large American
companies to Canada to take advantage
of our natural resources, employing
many skilled workers
 Free trade threatened Canadian
economic independence. America would
have increasing economic and political
control over Canada
Concept: Free Trade
Which argument do you find the most believable and compelling?

11. The Economy: Steps Toward Globalization
1990’s Canada: Looking Beyond the USA
Jean Chretien (Liberal) elected in
1993
Sends “Team Canada” trade
missions to Asia and Latin America
to sign trade deals and sell
Canadian business. Promotes
“Pacific Rim” partnerships
While our economic fortune is
closely tied to the economy of the
USA, Canada has diversified its
trade relationships, particularly
with Asian countries.

12. The Economy: Steps Toward Globalization
Concept: Globalization