Canada and the U.S. Try to Cuddle Up Again

Issue 09-19-11   |   Reviewer:   Duane Helleloid, Ph.D.

Abstract

Relations with Canada, America's largest commercial partner, have suffered since the September 11th attacks in 2001. Whereas trade with the United States made up for 76% of Canada's trade in 2001, that had fallen below 66% in 2010. New border protections have not only physically slowed the flow of goods and people, they have created layers of red tape and paperwork that discourage cross-border transactions. Recent measures to boost the U.S. economy with buy American legislation also end up hurting job creation in the U.S., as they make it harder for firms to do business with Canada, whose economy is much stronger and growing faster than the U.S. economy.

Beyond the border issues, there is also the problem of dumb regulations that impact businesses. Due to differing food safety rules, for example, General Mills needs to make two different versions of Cheerios. The U.S. Ambassador to Canada, David Jacobson, has been quoted as saying that he eats both, and that I do not feel any healthier or cheerier in one country or the other.





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