In the eighties, U.S.-Canadian agricultural trade has been characterized by a declining U.S. trade surplus, an increase in trade disputes, and an attempt to produce freer trade through bilateral negotiations. Factors influencing the level and composition of bilateral trade include general economic conditions, country size, climatic differences, tariff and nontariff trade barriers, exchange rate shifts, and government support regimes. Differences in domestic farm policies and in the level of government support to agriculture make freer trade in agricultural products difficult to achieve. In January 1988, the United States and Canada signed a comprehensive trade agreement that will reduce many barriers to trade, including some affecting agricultural trade.