The border between Canada and the United States is more than 5,000 miles long. People who want to go between the two countries have to pay a fee on goods they bring from one country to the other. Besides paying these customs fees, travelers between the two countries do not encounter any other stops. It is the longest undefended and unfenced border in the world.
Canada and the United States also share some cultural links. People who live near the US-Canada border can watch television programs and listen to radio stations that originate in both countries. In addition, hockey and baseball leagues include teams from both countries.
The two countries are closely linked economically. Canada buys about 25% of all US exports, while the US buys about 85% of Canadian exports. Canada and the United States created the Free Trade Agreement (FTA) to make it easier for the two countries to export and import goods between them. Part of the agreement was that all tariffs would be eliminated. Tariffs are taxes on goods that are imported; the taxes make goods more expensive for consumers. The FTA meant Canadians could get things in the United States at a lower price but it also meant that factories and plants in Canada closed as businesses moved into the US where costs were lower.
The FTA was expanded to include Mexico in 1993. The new agreement is called the North American Free Trade Agreement (NAFTA). It made North America the world’s largest trading area serving about 380 million customers.
Despite Canada’s trade agreements with other North American countries, it wants to avoid its own identity from being overshadowed by the United States. Some Canadians feel that there is an uneven relationship between the two countries. For example, most Canadians know the news that is happening in the United States, however Americans rarely pay attention to Canadian news.
US-Canada Relationship
Why might the US buy 85% of Canadian exports?
The close proximity of the country means transportation costs would be less. Also, the FTA means fewer taxes on imported goods from Canada.