Canada and the United States are each other's largest trading partner. Trade in agricultural goods has grown continuously since the signing of the Canada-United States Trade Agreement in 1989. The trade agreement removed most tariffs on traded agricultural goods. However, many nontariff barriers remain. We estimate the border effects for a select group of agricultural commodities and find that the quantity traded is less than would be predicted under free trade.T he Canada-United States Trade Agreement (1989) or CUSTA, and the Uruguay Round Agreement on Agriculture or URAA (1995) are the two major trade agreements affecting the level of agricultural trade between Canada and the United States. 1 The CUSTA removed most of the tariff and nontariff barriers on agricultural trade between the two countries. Some of the more contentious trade issues, such as the operation of the supply-managed system and the Canadian Wheat Board, were left to the URAA negotiations. Barichello et al. reviewed the effect of CUSTA on agricultural trade between the United States and Canada and concluded that trade was far from frictionless, even though many tariffs were lowered and some quantitative restrictions removed.The CUSTA went into effect on January 1, 1989, and was aimed at increasing trade between Canada and the United States by removing tariff and nontariff barriers. CUSTA did not result in a set of harmonized external tariffs for Canada and the United States and thus created a Free Trade Area (FTA) rather than a Customs Union or a Common Market. Those sectors deemed able to compete in the FTA had their tariff protection removed immediately while others had it eliminated over a five-or ten-year period. Trade restrictions were left on some