US–Canadian Economic Relations, Twenty Years after the USA–Canada Free Trade Agreement

Abstract

Canada's economic relationship with the USA is by far its most important trading relationship. Canada benefits greatly from being located adjacent to the world's largest and most advanced economy. Because of the free trade agreement that Canada implemented with the USA in 1989, the two economies have become increasingly integrated. However, the Canadian–US economic relationship has recently come under stress because of border security concerns in the USA, seemingly intractable trade disputes in some industries, and the complications involved in trying to address issues of bilateral concern in the context of the trilateral North American free trade agreement. Canada is attempting to diversify its external economic relations by negotiating new free trade agreements outside North America, but will remain highly dependent on the US economy and must address certain issues to ensure that the bilateral relationship remains robust.