Final answer:
The agreement that allowed free trade between BNA and the USA was a Reciprocal Trade Agreement. NAFTA is a notable modern example of a regional trade agreement that eliminated trade barriers, and trade relationships are often governed today through regional agreements and WTO rules.
Step-by-step explanation:
The agreement that allowed free trade between the British North America (BNA) and the USA is best described as a Reciprocal Trade Agreement.
This type of agreement involved two countries that agreed to reduce or eliminate certain barriers to trade between them, such as tariffs and quotas, on a reciprocal basis.
In the context of the 19th century, this often referred to arrangements before the formation of Canada as a nation.
However, the most well-known modern example of a trade agreement between Canada, the United States, and also Mexico is the North American Free Trade Agreement (NAFTA), which was later replaced by the United States–Mexico–Canada Agreement (USMCA).
NAFTA was a significant regional trading agreement that eliminated trade barriers between the three countries. Other examples of regional and bilateral agreements include the Caribbean Basin Initiative and a free trade agreement with Israel, which offer reduced tariffs.
These agreements, alongside organizations such as the World Trade Organization (WTO), strive to facilitate global free trade and resolve trade disputes.