Canada–United States trade relations

Canada–United States trade relations

The United States and Canada have the largest and most comprehensive trade relationship in the world. [] In 2006, total merchandise trade between the two countries consisted of $303.4 billion in imports and $230.3 billion in exports.Fact|date=May 2008 The trade relationship between the two countries crosses all industries and is vital to both nations’ success. Each country is the largest trade partner of the other. The trade across Ambassador Bridge between Windsor Ontario, Ontario and Detroit, Michigan alone is equal to all the trade between the United States and Japan. [US Embassy in Ottawa,] [ [ Agricultural trade disputes between Canada and the United States: costly but diminishing. | C.D. Howe Institute Commentary (, 2005) ] ]

Trade Before NAFTA

Since 1866, free trade has been debated topic by Canadian politicians.Fact|date=May 2008 Free trade was generally supported by the Liberal Party of Canada, and was a main topic in the 1911 Canadian Federal Election.Fact|date=May 2008 After the Liberals lost that election, the topic was a non-issue for many years. Although there were many bilateral agreements reducing tariffs, a free trade agreement was not reached until the Canada-United States Free Trade Agreement in 1988. The agreement intended to promote a free market between the two nations, and encourage investments within that market. [ [ Canada - United States Free Trade Agreement ] ]

North American Free Trade Agreement

The Canada-United States Free Trade Agreement laid the groundwork for a multilateral agreement between, the United States, Mexico, and Canada, called the North American Free Trade Agreement. NAFTA has helped fuel the relations between the three nations. Although there are some discrepancies between the countries’ especially in the area of automobiles and agriculture, the trends are negligible as the agreement has arguably been a boon for all nations involved. [ [ Agricultural trade disputes between Canada and the United States: costly but diminishing. | C.D. Howe Institute Commentary (, 2005) ] ]


There are several disputes arising from the bilateral trade between the two nations. The United States has placed Canada on its Special 301 watch list over intellectual property rights enforcement (although under the mildest category of "rebuke"). Other products from Canada under dispute include softwood lumber, beef, tomatoes, and other agricultural products. [ [ Agricultural trade disputes between Canada and the United States: costly but diminishing. | C.D. Howe Institute Commentary (, 2005) ] ]

The heightened border security as a result of the 2001 terrorist attacks has been an issue of concern for businesses in both countries. The Issue has become less of a concern as technology, registration, training, and fewer rules. However a midpoint estimate of US $10.5 billion cost to businesses in delays and uncertain travel time. []

One ongoing and complex trade issue involves the importation of cheaper prescription drugs from Canada to the United States. Due to the Canadian government's price controls as part of their state-run medical system, prices for prescription drugs can be a fraction of the price paid by consumers in the unregulated U.S. market. While laws in the United States have been passed at the national level against such sales, specific state and local governments have passed their own legislation to allow the trade to continue. American drug companies—often supporters of political campaigns—have obviously come out against the practice.

According to a 2003 study commissioned by the Canadian Embassy in the United States, based on 2001 data, Canada–U.S. trade supported 5.2 million U.S. jobs.


Since the September 11th attacks, there has been debate on whether there should be further North American integration. Some have proposed the adoption of the Amero under the North American Currency Union as the official currency of North America.Fact|date=May 2008 While these discussions are more prevalent in Canada, studies have shown that United States citizens would not object to economic integration. According to Former U.S. Ambassador Paul Cellucci however, “Security trumps trade” in the United States, and so as long as Canada is considered a possible point of entry for terrorists, such integration seems unfeasible. [“Cellucci’s Message,” National Post, March 26, 2003.]

ee also

* NAFTA's Impact on US Employment
* North American Forum on Integration
* North American SuperCorridor Coalition
* Security and Prosperity Partnership of North America
* Canada-United States relations


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