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The Economics of Canadian Trade with America
Issues of Sovereignty and Power Between Canada & the US

by Scott Fogden
October 7, 2003

The trading relationship between Canada and the United States represents a vast portion of the increasingly interlinked North American economy. In fact, directly or indirectly, the livelihood of most Canadians is dependent on this relationship.

Accordingly, when Canada distinguishes itself in political, social, or foreign policy terms, many Canadians worry “what will this cost?” in terms of harming cross-border trade. Whether it is decriminalizing marijuana possession or favouring the United Nations' process over the United States’ foreign policy, pebble-sized US recriminations cause economic tidal waves in Canada.

Moreover, as a country that has become increasingly unsure of its own identity – awash in American cultural influence – the question becomes how much can Canada profit before simply becoming the 51st state? Responding to this dilemma, finance minister John Manley once commented, “Canada can't get too far from the United States, but it shouldn't get too close either."

This is the first part of a mapleleafweb.com series on Canada-US relations. The following sections will observe this relationship in terms of economy and trade in order to gauge the health of the relationship and examine some trends for the future.

North American Trading Partners

The dynamics and history of the Canada - US trading relationship

Raw Materials and the Export Economy

Supplying the US economic machine

Canada’s Position in the Trade Relationship

The Canadian dollar, manufacturing, and value-added

Tariffs & Subsidies between Canada and the US

Protectionism and not-so free trade

The Politics of Economy & Trade

Diplomacy, Parliament, and the state of the relationship

Sleeping With the Elephant

The future of NAFTA and Canada-US ties

Links to Further Information