Canada-Us Trade Relations

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With over $400 Billion in trade last year it is inevitable that Canada and the United States are each others largest trading partners and more importantly, the largest trading relationship in the world. Trade relations between these two countries have amplified during the past decade through the 1994 implementation of the North American Free Trade Agreement (NAFTA). Nevertheless, the trading relationship between these two countries has not always been harmonious. Recent disputes over softwood lumber, beef and wheat have created a fair bit of animosity between Canada and the United States. Although the World Trade Organization (WTO) and even NAFTA have suggested promising dispute resolution provisions, there is still a fair bit of bitterness between these two parties. The focus of this paper is to evaluate the Canada-United States trade relationship and to focus more specifically on the three main commodities of concern; softwood lumber, beef and wheat. The conclusion of the paper will attempt to determine exactly where the future of this relationship lies and which country will fall victim to the Canada-United States trade dispute. 2.0The Softwood Lumber Dispute- Protectionism or Subsidizing? "Softwood lumber is one of Canada's largest exports to the United States, with over 19 billion board feet of lumber shipped in 2003 alone. These exports accounted for about $6.8 billion dollars. Over one third of the United States' softwood lumber supply comes from Canadian producers." With such extensive volumes of trade taking place in the softwood lumber industry disputes are virtually inevitable. At the root of the softwood lumber dispute is the claim made by the United States that Canada is unfairly subsidizing Canadian lumber production. Canada denies these claims and insists that they are not subsidizing softwood lumber but rather protecting the industry. The difference between the forestry industries in Canada and the United States is that in the...
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