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US-Canada Trade Relations: Friendship Beyond NAFTA
The Start of a Flourishing Relationship

The United States and Canada must have been friends for a long time that could be tracked even before the so-called North American Free Trade Agreement (NAFTA). Their relationship flourished when they stood side by side in the war against British invasion of Canada. The United States Government offered help during the War of 1812 and the Rebellions of 1837-1838. Canada back then, had always shown appreciation for every bit of aid that US offered them. Leaders as well as ordinary citizens find ways to escape the evils of war by going to the United States. The flow of commodities and goods between US and Canada are known to be the most significant ones in world trade. They have valued each good that goes in and out of their borders. They have submitted their items willingly to inspection before entering the ports of each zone. No wonder, their friendship strengthened and was extraordinarily beyond compare.

They have in fact helped each other in the course of international trade. The success of one is considered the success of the other. No wonder, their camaraderie blossomed throughout the years. They have regarded import and exports from both sides as relevant keys to the prospering of their existing and future economies. They have addressed all focal points of the NAFTA which they had considered as their tool to conquering global business.

There may be several conflicts but they never gave in to these tests of times. Apparently, these have even paved the way for more dealings with each other in order to prove wrong notions perceived by those who have been jealous with their incomparable affiliation. Due to a lot of hardships and tribulations they successfully sailed on together, the future has brighter things to say.

Major Imports and Exports for Both Countries

Every country in the world wants to do international business with the US. This makes US trade relations stand firm all throughout. In order to cope up with the investments made by the US to other countries in the world, Canada have considered the US as its largest trading partner, both for imports and exports.

Latest records show that for July 2008 alone, US exports totaled to $22.34 billion while imports went to a high of $30.68 billion. The total amount of the foreign trade between the two countries as presented by the Data Dissemination Branch of the US Census Bureau amounted to $158.71 billion and $205.79 billion for exports and imports respectively. This data includes only the seven-month period ending July 31, 2008. In detail, the following products are the main sources of commodity exchange between the two countries for the year 2006:

  • Canada’s Exports to the United States. Canada’s main product sent to the US is its petroleum which totaled to around $65 billion for 2006. Other product categories as ranked are passenger cars, car parts and accessories, complete and assembled cars, aluminum, lumber, finishing materials, plastics, telecommunications, and engines and engine parts.
  • Canada’s Imports from United States. Products brought in to Canada from the US marked a lot in the trade of the two nations. The first place of the top 10 imports from US is vehicle parts and accessories which amounted to a total of $23.6 billion for the year 2006. The other nine products are: passenger cars, trucks (including buses and special vehicles), industrial machines, engines and parts, plastics, electric apparatuses, computer accessories, industrial engines and iron and steel mill products.
Aside from the above-mentioned products which have improved a lot of the US-Canada trade relations for the year 2006, there are also notable products which have soared up in terms of sales. They have been widely recognized in both nations. These products are categorized as follows:
  • Fastest-Growing US Exports. The Americans have noted an extreme increase in sales for the following goods from Canada: copper (tracked at an increase of 122.6% or $1.1 billion for 2006), gold, natural gas liquids, nuclear fuel materials, specialized mining, non-ferrous metals, and on seventh place is precious metals (with an increase of 50.2% equal to $647.2 million dollars)
  • Fastest-Growing US Imports. Canada have noted high percentage of sales for the following US commodities: sugar (which noted an increase of 130.4% or $43.4 million for the year 2006), zinc, precious metals, oil field drilling equipment, copper, medicinal, dental and pharmaceutical operations and in the seventh place is nickel (which boosted an increase of 38.9% equivalent to $1.2 billion for 2006.
These increases in the prime commodities of US-Canada trade relations are evidences of a free flowing exchange of products for both countries. They have learned to value this from time to time and despite having no data yet for the year 2007 and 2008, we could conclude that the percentages and amounts soared even more.

The North American Free Trade Agreement (NAFTA)

Centuries have passed and yet the partnership of US and Canada never failed to amuse other parts of the world. From the wars to global business, they have excelled to greater heights. In order to fortify their alliance, they have made a pact that have been advantageous for them for the past years and will benefit them in the future. In 1988, the US-Canada Free Trade Agreement was formulated which later on led to the North American Free Trade Agreement which also involves a third nation, Mexico.

Agricultural provisions found in the US-Canada Free trade Agreement were included in the NAFTA. Trade and investments for this particular aspect have seemingly brought more benefits to farmers from the three nations. All tariffs pertaining to agricultural trade between US and Canada were removed except those which are covered under the tariff rate quotas (TRF’s). This agreement heightened more of the global trade particularly that of US and Canada. As proof to this, it was recorded that US exporters of fresh and processed fruits and vegetables reached a sales record of 11.9 billion in 2006, which made an increase of $7.6 billion from 1990’s $4.2 billion record. Planting seeds, sugars, sweeteners and beverages virtually rose in 2007.


Unlike any other friendship, some conflicts were seen in the trade between these two countries. They may have not affected the exemplary and professional relationship, but to point out some issues, the following concerns were tackled accordingly:

  • On NAFTA. Barely three years after the implementation of the NAFTA, the first dispute settlement saw some disparities on the tariff imposed by Canada on agricultural goods like dairy, poultry, egg, barley and margarine products. These products were not subject to tariff barriers, however the panel found the consistency of the imposed tariff, thus favoring Canada’s side. NAFTA also walked its way to allow either US or Canada to take emergency precautions should the imports affect domestic output.
  • On Accounting Principles. Differences in accounting for foreign trade between the two groups have also been apparent. In order to settle the disparity, Canadian standards converged with International Financial Reporting Standards (IFRS). The IFRS may somehow create a new difference but the message is clear. The provisions in these standards are workable with that of US Generally Accepted Accounting Principles (GAAP). Due this, a reduction in the conflict between the Canadian accounting standards and US GAAP amicably matured.
  • On the September 11 issue. All countries were affected by the World Trade Bombings. Canada was severely impinged on by this economic crisis. This even extended to concerns of whether North American incorporation should pull through. But then, for the Canadians, amity is more important. This was a time for them to give back what America had gave them long before. They never used this as a hindrance as these are but just speculations of oblivious and resentful individuals.
The Future of the US-Canada Trade Relations

There may be no clarity as to the effects of the convergence of Canada to IFRS in order to cope up with the international business standards of the United States. The only known fact here is the way by which both have embraced all the kinship and get rid of the arguments. This may just boil down to saying that no accounting standard could provide a blockade to ruin a well-founded comradeship. The NAFTA on the other hand will continue to work on the imports and exports for both the United States and Canada. There is no such thing as whose ideas go first or who is left lagging behind. The closeness will bridge all the gaps of unfamiliarity. Not a single issue could break the ties that were instituted for centuries.

Both countries see the potential of having more transactions in the future whether it is of international or merely foreign trade between them. They will obviously go on with what they have initiated in the past. As part of the pioneers to a blossoming acquaintance, Canada will see to it that it will move forward with the aid of the United States and vice versa. No laws and rules of each land could create the partition of this highly commendable professional liaison.


Note: Trade statistics, industry links, economic projections and global business resources on this page have been compiled from hundreds of trade related websites, government guides and resources on the Internet. We provide this valuable information for industrial suppliers, manufacturers, exporters and importers seeking to enter or expland business opportunities in Canada.

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