TORONTO -- Former prime minister Brian Mulroney says that after 25, free trade with the United States has transformed a generation of Canadians.

Mulroney defended the agreement, a cornerstone of his legacy as prime minister, on the anniversary of the day it was reached, Oct. 3, 1987.

He did so before a crowd of political heavyweights of all party stripes at a gala event in his honour at the Royal Ontario Museum Wednesday night.

Free trade, which was deeply controversial at the time, has tripled the country's trade volume since 1989 and also vastly improved Canadian's sense of identity, he said.

"A generation of Canadians has grown to maturity over the past 25 years under the assumptions of liberal economics and international integration for

Canada," he said. "This is now a Canada that is confident and ambitious, not just in relationship to the United States, but in relationship to the world."

Mulroney said the deal wasn't brokered until close to the deadline when he pressed then U.S. treasury secretary James Baker to give in to a crucial dispute resolution mechanism that would protect Canada.

Mulroney threatened to take the problem straight to then U.S. president Ronald Reagan and believes had it not been for his personal rapport with the leader, the deal would not have got done.

"Anyone who tells you that personal friendship doesn't count in the conduct of foreign affairs, that nations only have interests and nothing else, does not have a clue what he's talking about."

Mulroney also praised his successors of all party stripes for continuing to build on the free trade agreement. He lauded former prime minister Jean Chrétien for not heeding political cries at the time of his election to tear up the policy.

"To his credit, Mr. Chrétien, aided by finance minister Martin, used the great economic benefits from free trade and the proceeds of the GST to eliminate the deficit over time and begin the process of paying down the debt in an orderly fashion," Mulroney said.

Mulroney also used the event to warn that Canada must step up efforts to sign free trade agreements with emerging economic powerhouses China, India and Brazil.

He said government and industry must work together to negotiate future trade agreements to open up these markets to Canada. "Our negotiators will need to be nimble and determined as they leverage and exploit our comparative advantages to specific, strategic objectives that
will safeguard and enhance vital market access, preserve intellectual
property rights and the sanctity of a rules-based trading system."