Transcript Canada-US Trade Relations with a Focus on - K

A Tale of Two
Countries:
US – Canada Trade
Basic Trade
Vocabulary
• Export – any good that is sent out of the country
• Import – any good that is brought into the country
from another
• Voluntary Trade – trade between countries in which
both countries benefit from the exchange
• Trade Barriers – economic, political, or geographical
conditions that make trade difficult or impossible
• Specialization – when a country produces the goods it
can make easily and trades for the goods it cannot
easily produce
US – Canada Trade
• Canada and the US both have marketstyle economies
• Largest trade relationship in the world –
valued at $627 billion in 2011
• Canada is the #1 foreign supplier of
energy to the United States.
Side by Side
Comparison
Canada
United States
GDP
$1.389 trillion
$15.04 trillion
GDP per capita
$40,300
$48,100
Services (% of
GDP)
Industry (% of
GDP)
71%
80%
27%
19%
Agriculture (% of 2%
GDP)
1%
Specialization
Canada
• Motor vehicle, machinery,
and aircraft parts
United States
• Agricultural products
• Chemicals
• Telecommunications
equipment
• Capital goods
• Plastics, chemicals
• Automobiles
• Wood pulp and timber
• medicine
• Crude petroleum, natural
gas, electricity
Exports and Imports
• Canada
• 75% of exports go to the US
• 50% of imports come from the US
• United States
• 19% of exports go to Canada
• 14% of imports come from Canada (2nd to
China)
Making Trade Easier
• North American Free Trade Act (NAFTA)
• Signed in 1994
• Promoted free trade between Canada,
Mexico, and the US by removing economic
trade barriers
Exchanging
Currencies
• In order for countries to trade, they must exchange
currencies.
• Exchange Rate – the value of one country’s currency
compared to another country’s currency
• For example, if an American company wants to buy
lumber from a Canadian company, the American
company will exchange American Dollars for
Canadian Dollars so that the trade can take place.
References
• CIA World Factbook (2012):
• Canada - https://www.cia.gov/library/publications/theworld-factbook/geos/ca.html
• United States –
• https://www.cia.gov/library/publications/the-worldfactbook/geos/us.html