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Canada and the United States share a lot in common which has enhanced their trade ties. Apart from their closeness in terms of geographical location, they have a lot of cultural similarities which has made their trade links convenient. Canada and United States have also been experiencing a similar rate of economic rate as they are affected with almost similar issues. When it comes to trade agreements, they are part and parcel of most trade agreements that have been signed in the world. United States has kept Canada close due to the benefits that are attached to their economy. Canada seems to have most of the products that US has. They have been hence working together and exchanging technology and knowledge. The question that has however arisen over the year is whether the trade relations between the US and Canada are for the benefit of both countries or not. United States has been considered to be a super power that devises clever ways of entering unto trade agreements that they will benefit from (Levi, 2009). In this paper, we will critically analyze the situation and see how Canada and United States are benefiting from the trade agreements.
The economic situation
United States and Canada's economies have been growing at a rather similar rate even though the US still holds the mantle. The GDP of the countries have been experiencing an upward toll with the rate of employment in creasing. However things have been changing in the recent past as the countries struggle to maintain their economic position. The recent recession which was related to the September 11th attack left the nations devising means of coming back to track. When it comes to economic growth and revival, nations tend to forget about the other nations and concentrate on passing policies that will help them achieve their targets. A country will always be admired by another nation because of the economic resources which are likely to be of help to the other nation. United States has been known to invent all forms of technology that enables them to utilize the few resources that they have. This has made the nation enter into various trade deals with the aim of gaining some raw materials that will act as resources for their industrial production. It takes quire sometime before some nations realize the economic value of their resources. Most of the resources may go unexploited due to lack of equipments for the same.
The United States is one of the countries with best technological advancements. They enter into particular deals with an agenda of benefiting from the other nation. America for instance partners with Japan with the agenda of obtaining technology and technological knowledge that will enhance their machinery. Its economic links with china are aimed at improving their nuclear weaponry that will enable them deal with terrorist attacks. America has also been upfront in wars that pertain to the Middle East due to the presence of oil in the region. United States forms the basis of the world's economy, this may not be because they have more resources than other nations but simply because they know how to utilize and multiply what they have. Compared to other nations, United States ahs always been on the forefront when it comes to innovations and discoveries. They have been able to discover some of the hidden treasures in other countries and hence being able to exploit them to the maximum. They have always explored other nations with the positive intentions of revealing to them the hidden treasures that they have no idea of. Due to their machineries that have always been to their advantage, they take the responsibility of exploiting the land.
The country will be paid a little loyalty fee in addition to the improved transport and communication network that the will facilitate to enhance the transportation of such products. America has manufacturing industries that will transform the raw materials into finished products that will be sold back to the nations where the raw materials were obtained. Due to the processing procedures involved plus an additional profit, the products are sold at a much higher price. America is probably one of the countries that have least minerals yet they make more money from processing raw minerals and selling them as finished products. Most of the processing technology has its origin in America ad before it is adapted in other nations, they will have benefited from it a great deal. When the country shows an interest of visiting and entering into trade negotiations with other nations, they have already done their calculations and ascertained their gains (Brown, 2002). They usually come with good packages that the concerned nation will find it difficult to resist. And America being a nation with a faster economic growth, and with their technological prowess, they seem to lure every nation they approach for similar deals.
Canada is mostly known for its agricultural products that America takes advantage of. There is a lot of exchange of technology, raw materials and finished products that is taking place between America and the Canada. Canada benefits from technological equipments which they are able to import from America at a subsidized rate. America on the other hand obtains agricultural products such as meat, milk, flowers and grains from Canada where they use them to manufacture finished products. It may be said that America acts with generosity towards Canada especially in supplying them with some of their technological equipments that they use t process their products. This to America is not a big deal as long as they are assured of getting their share of the raw products that they will manufacture. The manufactured products are usually sold in other nations at a good price which caters for any other expenses that the company may have encountered. America also uses unique technology where the blend raw materials from various nations to come up with a high quality finished product.
Cultural relations that enhance trading activities
America and Canada enjoy a similarity in culture which has made their trade links to be more pronounced. America and Canada are liberal when it comes to their clothing and food. This is due to the fact that the two countries have accommodated a number of people from diverse communities. The ability of the two nations to integrate various cultures has enabled them enjoy trading partnership. Products that are manufactured in United States are easily accepted in Canada due to similar interests. As they enter into trade agreements they will rarely be encountered by barns and trade limitations that are associated with the production of goods that may not be acceptable by the people. They also have similar religious beliefs apart from few instances that have been brought up by migration (Thompson, 2008). There are basically no religious tensions that may make the products of the two nations to be less accepted by the other. An added cultural advantage is their geographical locations which make them enjoy similar climatic conditions and hence facilitating trade.
Geographical location is one of the major hindrances to trade considering the distance that may be required in exchange of the products. There are some goods that are highly sensitive to climatic changes and hence affecting the state in which they arrive to their destinations. Apart from the transportation costs that may be involved, there is also the issue of storage and preservation. Food substances, healthcare materials and facilities, cloth materials and the likes may be affected by climatic changes. As they go through different altitudes, they may get contaminate and hence affecting their freshness and quality. They many hence end up reaching their destination when they have become poisonous or of a lower quality then they reached. This has been one of the factors that have hindered a number of nations from transporting finished products to other countries. Unless there is a good storage and transport facility, goods may not reach their destination fresh and fit for consumption (Schaffer, 2008). United States and Canada enjoy favorable climatic conditions due to their close geographical locations. They will hence not incur much when it comes to transportation and storage.
Canada and America enjoy a flexible transport and storage system which enables their products to reach their destination safe and sound. Minimal inconveniences involved in the transportation of the products also make them enjoy low tariffs on exports. America finds it easy to enter into trade agreements with Canada because they can obtain raw materials for their products faster and with lesser inconveniences. They can take advantage of the geographical location to obtain as much products as they need. To enhance the trade relations between the two countries, Canada supplies the US with raw materials at a subsidized rate as America supplies them with finished products and technology at an equally subsidized rate. United States understands the treasures that are in Canada and the fact that they can easily obtain them without having to travel far to gain a monopoly over them. In fact, Canada is the biggest supplies of agricultural products to United States compared top what they export to other countries (Grinspun et al, 2007). Trade treaties that they have entered into enable them to gain monopoly over the others as well as give them a trading advantage.
The main difference between US and Canada that slightly affects their trade relations is the difference in their system of government. Even though they both practice a federal system of government, Canadian provinces are more powerful than the federal government. This is contrary to the US government where the federal government has more power and authority over the state government (Block, 2003). This system of governments mainly affects the kind of business deals and agreements that can be entered to by the two countries. In as much as the US federal government can make decisions on behalf of their state government, the federal government in Canada may not have a say especially if a certain province is dissatisfied with trade policy that are to be implemented on its behalf. For a trade policy to be made between the American government and the Canadian government, they have to go through long procedures where the provincial state governments have to be consulted. Due to varying views the policies may have to go through various debates and amendments before they are accepted and passed by all the provincial state governments in Canada (Stern, 1989). There are some trade governments that mainly affect certain provinces and states in the countries. However, due to the complex systems that they have to go through, their implementations are delayed as various authorities are consulted for consent.
Compared to United States, Canada emphasizes on the importance of distributing equal resources to its state provinces to enhance equal development. The provinces have the power to demand the federal government to facilitate certain development activities especially if they are found lacking in the province. The federal government has to give an account of how federal funds have been distributed and implemented. The federal government is mainly endowed with the responsibility of distributing resources rather than implementing policies on behalf of the states. Due to cultural differences and geographical coverage, the provinces may be having different needs that have to be catered for by the government. The resources are usually distributed in consideration of the physical size of the province and their population. Correct ratios have to be done to ensure that the facilities established in each province are well supplied with funds and materials. The US federal government o the other hand distributes the funds according to the economic importance of a state. This has made some of the states in united states that have little economic advantages to be underdeveloped (Hessing, 1997). They are neglected as the funds are used to develop states that have a high potential to attract investors.
Is Canada benefiting
The question that has been raised from the trade ties between United States and Canada is whether it is benefiting. Such a concern has mainly arisen because of the difference in political leadership and the fact that America obtains most of its agricultural raw materials from Canada. Canada is an equally developed nation like United States and has a government system that enhances its economic growth. Apart from being supplied with the necessary raw materials, Canada has also developed its technologic prowess that enables them to manufacture and process their products. However, through the economic ties that they share with United States, Canada has also gained an economic advantage with other nations. Most of the nations that enter into trade toes with United States also do the same for Canada considering the similarities that they have. United States also makes trade treaties with many other nations that Canada has not been able to enter into. Being close neighbors and having a symbiotic kind of relationship, Canada easily benefits from other resources that America derives from mother nations. For instance, the main economic threat that America faces is terrorist attacks. This has prompted the country to enter into military treaties with Asian countries for the purpose of obtaining the necessary nuclear weapons that will enable them fight criminals.
The country also collaborates with technologically developed countries like chin and Japan for the purpose of gaining technology that will enable them detect terrorist attacks and hence securing their economy. Canada shares some boundaries with United States and for them to maintain peace; they also have to monitor the Canadian borders. In the process of America acquiring the necessary technology and weapons to fight terrorism, Canada benefits from the same without necessarily signing the treaties with other countries. America also has the responsibility of securing the estate of Canada due to the economic benefits that they derive from them (Rugman, 1990). They also offer such protection as an enticement procedure to ensure that they are favored by the Canadian government even when they have to go through a change in leadership. Canada also looks at America as a good trade ally due to the technological advancements that are being made. The fact that they share a similarity in culture also makes them able to share ideas and implement projects that will enhance development.
America boasts of having some of the best learning institutions with many people across the world flocking there to obtain knowledge. Some of such institutions have established their branches in Canada which has not only been an advantage to the Canadians who benefit from similar resources but also made them attract foreign students. Canadians were the first people to benefit from educational facilities being offered by United States which has contributed to their technological development. The literacy level of Canada and America is almost the same due to the educational facilities that they have been able to share. However, Canada remains to be a country whose literacy level is equally distributed in among the states. As mentioned earlier, such equal development is because of their system of government that facilitates equal distribution of resources among the state provinces (Holley, et al, 2008). Due to the close economic ties that the countries share, it has been feared that the changes taking place in leadership many make the state provinces in Canada to weaken to accommodate trade links especially with America. America is having a lot of influence on Canada and their may make them compromise on their political supremacy. As they get more involved in economic issues, it has a direct effect on their political issues due trade policies and agreement they have to make and implement.
The economic position of a country is the main determinant of how strong they shall be politically. It is mainly because of the economic benefits that are attached to a certain system of government that prompts nations to enter into such treaties. Economically reach and secure countries will attract foreign investors who will want to benefit from the resources of a nation. When entering into economic ties, there is usually a symbiotic kind of relationship that is involved where by they will benefit from each other. America is a nation that has a lot of attachment to countries with a promising economic development through their resources. They are always willing to give out their technological know how in exchange of raw materials. Canada has been its close ally for years due to the geographical boundaries that they share as well as their vast resources. Canada has benefited a great deal from such trade alliances as it is saved the need of having to sign treaties with other countries that America signs. They are like two sisters who have to stand with each other and benefit from what they produce.