|7 September 1985
||Prime Minister Brian Mulroney announced Canada would not take part in the US Strategic Defense Initiative (SDI), which aimed to develop a system to defend the US from nuclear missile attack. Mulroney did not want to risk cooperating with the unpopular Reagan administration on a high-profile defence project at the same time that he was pursuing a free trade agreement with the United States. The Canadian government took no part in the project, though Canadian companies and universities were welcome to contribute to the research.
|2 January 1988
||Canada and the United States signed the Free Trade Agreement. The federal election of November 1987 had been fought over the controversial trade pact, which removed tariffs on goods produced in Canada or the United States, but did not include an effective mechanism for resolving disputes. Mulroney won the election handily and proceeded with the agreement. In 1992, he negotiated the North American Free Trade Agreement (NAFTA), extending the Canada–US trade agreement to Mexico.
|11 January 1988
||Canada and the US signed the Arctic Cooperation Agreement in Ottawa. Each country held fast to its position on the Northwest Passage, but the US agreed to seek Canadian permission before US ships sailed in what Canada claimed were internal waters, and Canada agreed that it would grant that permission.
|13 March 1991
||President George H.W. Bush and Prime Minister Brian Mulroney signed the Canada–US Air Quality Agreement, agreeing to reduce emissions of the compounds that cause acid rain.