Introduction
In essence, countries relate in order to meet the needs of their people in terms of resources, economy and political influence. Since the political independence of most countries, the governments interacted to seek support and such resources as energy. In this regard, each country had it form of civilization and growth depending on the time when governments stabilized. This research evaluates the relations between the USA and Canada in the global economy as key entities in the North America.
Relations between USA and Canada in global Economy
Policy and Complaints
The relations between political economy of Canada and the United States have become continuously straining than the previous literature states. They have been undergoing various issues of political tension related to policy perspective where governments have shown different positions. As Malmgren and Drouin (2015) suggests, the government led by Reagan have been trying to liberalize the national and international sectors in order to remove various twists among the 2 countries. Ottawa also strived to develop ways in which he could insulate his country against political and economic pressure from the world especially the United States. However, the two countries have listed various complaints against each other especially on their policy differences. For instance, there have been controversies regarding the NEP and the expansion of FIRA that discriminate the outsiders while favoring the Canadians. These policies and activities proceed to challenge the USA where the commerce department has been directed to identify the complaints and policy contradictions.
Employment Benefits
The countries have signed agreements to back regional trade where the movement of good/services to and from either country (Taylor, 1998). Furthermore, citizens of these countries can move from their region towards the other countries with minimal restrictions. They also have various sectors that have been integrated to facilitate cross-border goodies worth of 1.3 billion dollars. The Canadian exports to the USA account for about 25% of their overall GDP. On the other hand, the USA gets about 75% of the Canadian exports that is fifty percent of Canada’s imports. This trade relation accumulates about a seventh of the employment capabilities in Canada notwithstanding the widespread investments. Although the investments may not show the real relations between the countries, most of them are used as raw products in US manufacturing companies.
NAFTA and US-Canada FTA
North America has been having barriers to trade in respect to such countries involved in business as Mexico. However, the USA and Canada work together to enable the transition of easier trade commitment along the North America. One promising development aiming to facilitate cooperation is the perimeter securities and economic competitiveness amongst nations. The partnerships between region and federal government from both countries play vital roles in ensuring that transition across borders and cooperation are implemented. Fifteen years after the signing of the NAFTA, the trade between the USA and Canada tripled (Panitch & Gindin, 2013). This relationship shows that the countries had an advantage when working together to meet the needs of their citizen with the resources available between them.
USA and Canada to Other Countries
On a worldwide perspective, the USA had concluded 4 negotiations with other countries like Oman, Australia, Bahrain, and Singapore while 2 others were on negotiations. Canada had no negotiations completed by other countries but had ongoing agreements with Korea, India, and Singapore. Free trade initiative with Asian countries and USA are also proceeding to enhance movement of good without tax cost. The initiative currently being referred to as the Trans Pacific Partnership includes partners like Peru, Vietnam, and Australia as well as the 2 subject countries being reviewed.
National Airspace
Canada has agreed to Open Skies with about 12 other countries inclusive of the USA. In comparison, the USA has open skies with over a hundred countries globally. The only open sky for Canada in Asia is South Korea that makes the country less competitive within the Asia. The Canadians, therefore, have to pay more money to travel countries within Asia. This cost has influenced the preference changes where the Canadians cross border to the United States in order to use their services. In the year 2009, it was reported that 2.3 million people had sought transport services while using the USA airlines. This attribute leads to the loss of 1 billion dollar income directed to the US.
Cross Border Inspections
In a bid to facilitate the security on the border and curb various outputs from Canada, Canadian and the US governments have initiated inspections that delay the flow of trade between the 2 countries. By boosting the efficiency of trade and other activities being conducted at the borders, a reliable system can be created to favor the business in both countries. For instance, the countries promote and enhance shippers and travel of trusted people. They developed a way to prevent duplicate inspection within the borders by making the forces at the border work together. The 2 countries have invested in making the borders clearances easier through the use of technology in communication and weigh technology. Furthermore, they have setup many staff members to aid in times when the trade peaks depending on demand. Moreover, the solutions of problems encountered within the boarders like load limits, regulated substances, product standards and truck size are checked and cleared before the border in order to reduce the workload. Furthermore, border clearance charges have been eliminated to make the transition fast. In fact, the passenger trains travel each day between the countries to meet their mutual interests.
Border Services and Agreement Implementations
The USA and Canada have subscribed to their FTA and NAFTA to accelerate their integration since 1989. In essence, they have become natural trading areas in respect to their geographic placing in regional economics and proximity of regional facilities. Their citizens share language and cultures. It is argued that people from Canada live within the USA near the border making the communications and business easier through social connections. Most people prefer using commodities from the USA due to their low prices and high standards making the way of life almost equal to that of the Americans. The economies of both countries differ since the US economy dwarfs that of Canada. In fact, the Canadian GDP is 9 times lower than that of the USA.
Although these aspects come as an advantage for Canadians, it arrives at a cost of their national economies as an independent sovereign. However, the USA also offers a large market for its exports via the NAFTA in respect to its 11 time parity to purchase. Even with these benefits, the small-scale businesses import products from the USA after delivering the raw materials. In this manner, Canada cannot make income from exporting while importing the end products at the same time. The trade alongside the borders makes Canada unequal as the economy slows down due to the exchange.
Trade and its Effects to GDP
There are similarities between the sectors affecting the GDP between the two countries. For instance, about 67% of the GDP is retrieved from the services even though the sector is large when compared to the US GDP. The falling GDP sectors include Manufacturing for the 2 countries for the recent past. However, it still remains as a significant sector for Canadian government rated at about 27%-22%. It remains significant section is agriculture the accounts for the remaining 2% in Canada and 1% in the US. The expenditure of Canada has a higher deficit spending (84.0%) than the USA at 62.9% of the GDP in 2009-2010.
Canada and USA Partnership
In respect to this evaluation, it is notable that Canada is a secondary imperialist partner where products and services are traded for the mutual benefits of the citizens. Although the USA benefits more from the NAFTA program as a major exporter of secondary goods, Canada avails some of the primary resources used for manufacturing. About 204 billion dollars and 224 billion dollars of exports and imports were exchanges between the USA and Canada in 2009 (Klassen, 2009). Earlier reports in 2007 indicated that China had replaced Canada in the importation business to the USA. This aspect rendered the business operations of the Canada-US NAFTA impossible making Canada to fail. The growth of China as a superpower in the economy has continuously affected the direct investments between them.
WTO
Another interaction point between the US and Canada is in the WTO, where they have both subscribed in agreements regarding how to conduct trade in acceptable standards for all countries. It is also similar that the USA and Canada have entered into free trade area partnership with Mexico. Contentions apparent in the 2006 lumber agreement between these countries remain arbitral where Canada sought advice from the WTO regarding the labeling. The USA placed Canada on Special 301 priority during the intellectual property right policies and problems. Protests have been made against the products arising from the USA in Canada aimed at boosting their home made products for use in place of the American packed ones.
Border Attacks
Finally, the borders between these countries have been used for terror attacks due to their weak formation usually aimed at influencing fast movement. These attacks are exemplified by the 2001 attacks near the border. However, both governments have ensured continuous commitments to resist trade slow down and improve commerce as well as the security.
Conclusion
The relations between countries enhance the development of countries and allow them to interact depending on their agreements. Such agreements make national friendly and partner in trade and cooperation. The ties between Canada and the USA make them strong mutually benefiting from resources available (Klassen, 2009). The abilities of a country to connect with others in order to avail resources essential for its citizen are crucial. The people without employment are able to move to other regions where jobs are available.
When the Canadians move to the US, they are able to get hired and receive salaries while the USA receives the required workforce with its increasing population. This study has shown some of the features and benefits of a free trade area as well as the cooperation with other countries. They included the capabilities in transporting people across the globe, sharing of transport infrastructure, expansion of labor, mutual growth in GDP, and improved living standards along countries
References
Klassen, J. (2009). Canada and the New Imperialism: The Economics of a Secondary Power. Studies in Political Economy, 83(1), 163-190. doi:10.1080/19187033.2009.11675060
Panitch, L., & Gindin, S. (2013). Canadian Political Economy andthe Making of Global Capitalism. Studies in Political Economy, 92(1), 101-115. doi:10.1080/19187033.2013.11674978
Taylor, C. (1998). The Politics of Recognition. Contemporary Political Theory: A Reader, 3(2), 25-73. doi:10.4135/9781446215272.n30
