Canada–United States trade relations
The United States and Canada have the largest trade relationship in the world. In 2012, US merchandise trade with Canada consisted of $324.2 billion in imports and $292.4 billion in exports. 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 and Detroit, Michigan alone is equal to all the trade between the United States and Japan.
Trade Before NAFTA
Since 1866, free trade has been a debated topic by Canadian politicians. Free trade was generally supported by the Liberal Party of Canada, and was a main topic in the 1911 Canadian Federal Election. 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 1987. The agreement intended to promote a free market between the two nations, and encourage investments within that market.
North American Free Trade Agreement (NAFTA)
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 none all nations involved.
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.
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 2007 study commissioned by the Canadian Embassy in the United States, Canada–U.S. trade supported 7.1 million U.S. jobs.
|U.S. State||U.S. Jobs Supported||Rank|
|District of Columbia||29,000||38|
The Canada–United States softwood lumber dispute is one of the most significant and enduring trade disputes in modern history. The dispute has had its biggest effect on British Columbia, the major Canadian exporter of softwood lumber to the United States.
The heart of the dispute is the claim that the Canadian lumber industry is unfairly subsidized by the federal and provincial governments. Specifically, most timber in Canada is owned by provincial governments. The price charged to harvest the timber (the "stumpage fee") is set administratively rather than through a competitive auction, as is often the practice in the United States. The United States claims that the provision of government timber at below market prices constitutes an unfair subsidy. Under U.S. trade remedy laws, foreign goods benefiting from subsidies can be subject to a countervailing duty tariff to offset the subsidy and bring the price of the product back up to market rates.
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. 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.
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The strength of the Canada-U.S. relationship is demonstrated by impressive bilateral trade of approximately $1.9 billion a day, along the world’s longest undefended border. Energy trade is the largest component of this cross-border commerce. Canada has the third-largest oil reserves, after Saudi Arabia and Venezuela, because of its oil-sands resources. The United States has historically been Canada’s only foreign market for natural gas, oil, and hydro power. In 2010, almost 100% of Canada’s exports in these commodity classes were destined for the United States. Canada is the largest foreign supplier of crude oil (25% of oil imports) and natural gas to the United States. In short, this energy relationship has enhanced U.S. energy security and provided Canada with security of demand for its energy exports. Yet, this highly integrated U.S.-Canada energy relationship may change dramatically in the near future. U.S. oil and natural gas production and reserves are expanding because of growing shale oil and gas developments. Furthermore, the U.S. Energy Information Administration (EIA) forecasts slower growth in U.S. oil and natural gas consumption in the coming decades to 2035. Consequently, the United States no longer appears to be an unlimited market for Canadian energy, leaving Canada seeking new destinations. In addition, imminent policy decisions in the United States, such as whether to approve Keystone XL, may have profound effects on the U.S.-Canada energy relationship for decades and will have a significant impact on energy markets beyond North America. Both Canada and the U.S. are increasingly reliant on foreign investment to develop their resource sectors, and Asia has been an important source of capital. Asian investors initially focused on project investments as minority jointventure partners but are showing increasing interest in owning production companies. Asian investors' objectives for investing in the North American energy sector include both attractive financial returns on investment as well as an interest in North America as an energy supply source for their economies. The expanding energy investment and trade between North America and Asia can be mutually beneficial.  More in Pacific Energy Summit.
Media and culture
Because English is the majority language in both countries, and accents and dialects on both sides of the border are (relatively) similar (as compared to the British or Australian English), both high culture and mass media are easily traded between the two countries. Both countries have minority-language media, of course: Canada has a large francophone population and the United States a large hispanophone population, and both countries have other immigrant and indigenous language populations; however, cultural trade is mostly through the English-language media. The major difference is that America's English-language media market is more fifteen times as large, meaning that American producers of books, newspapers, magazines, radio programs, songs, films, and websites have an in-built advantage over their Canadian competitors. This has been the case since the nineteenth century when Canada was flooded with American books. It was also the case in the 1920s when Canada's radio market was dominated by American broadcasts, leading cultural nationalists to form the Canadian Radio League, a pressure group demanded that the Canadian government create a publicly funded broadcaster to compete with the American stations. This was the beginning of a pattern Canadian cultural protectionism, which has caused frequent trade disputes between the two nations. During the 1950s, the pattern was repeated in television, with Canadian stations airing US programming and US stations broadcasting into Canada, leading to the creation of CBC Television in response. Since the 1970s, Canadian radio and television stations have been required to air a minimum percentage of Canadian Content. One source of tension is a difference in philosophy: the Canadian position is that Canada's culture must be protected to preserve Canada's nationhood and should therefore be excluded from free trade agreements, whereas Americans negotiators have claimed that media is a commodity like any other. This difference came light during the dispute over "split-run" magazine during the 1990s. Split-runs are American or other foreign magazines which produce a slightly modified Canadian edition and which re-sell much of the advertising space in the magazine to Canadian advertisers. Publishers of Canadian magazines argued that the Americans were poaching all their advertising revenue without producing substantial Canadian content. The American publishers and the US government claimed that banning "split-runs" was illegal under international trade law. There have also been disputes over the generous tax credits that the Canadian federal and provincial governments give to television and film productions. This, combined with a weaker Canadian dollar caused American filmmakers to complain during the 1990s that "runaway productions" were hurting American employment in the film industry, especially in California.
- NAFTA's Impact on US Employment
- North American Forum on Integration
- North American SuperCorridor Coalition
- Security and Prosperity Partnership of North America
- 2012 U.S. trade in goods with Canada, http://www.census.gov/foreign-trade/balance/c1220.html#2012
- US Embassy in Ottawa, http://ottawa.usembassy.gov/content/textonly.asp?section=can_usa&document=trade
- "Agricultural trade disputes between Canada and the United States: costly but diminishing. – C.D. Howe Institute Commentary (, 2005)".
- Canada - United States Free Trade Agreement
- "State Trade Fact Sheets 2008". Canada International. Retrieved 16 November 2010.
- “Cellucci’s Message,” National Post, March 26, 2003.