Three Possible NAFTA Scenarios

Posted on Tuesday, September 13 at 13:25 by jensonj
Why? Why should Canadians bother trying to understand what is happening in the U.S.? Here's why: First, Canada and the U.S. are far more interdependent than most people realize or, in many cases, prepared to acknowledge. Ottawa and Washington talk about the world's largest bilateral trading relationship. But we really don't trade with each other, not in the classic sense of one independent company sending finished goods to another. Instead we make stuff together. What characterizes the North American economic system and has differentiated it from Europe is the way in which industries have built integrated continental production, sourcing and distribution systems on regional specialization. Our economy is increasingly structured by these cross-border systems. We also share integrated energy markets; dip into the same capital markets; service the same customers with an array of financial services; use the same roads and railroads to transport jointly made products to market; fly on the same integrated airline networks, and increasingly meet the same or similar standards of professional practice. Autos are a vivid example. About a quarter of the upwards of $1.25 billion in goods that cross the U.S.-Canada-Mexico borders daily is automotive. But we don't sell cars to each other. We build them together. Can Canada withdraw from this system? It would be foolish to say it's impossible. But certainly it would be enormously expensive in terms of Canada's financial, economic and human resources. Over the past 30 years, this economy has been restructuring on a North-South axis. For the most part -- notwithstanding grievances like softwood lumber -- continentally integrated industries have become more efficient and more competitive. http://www.embassymag.ca/html/index.php?display=story&full_path=/2005/september/7/blank/

Note: http://www.embassymag.c...

Contributed By



Article Rating

 (0 votes) 

Options




Comments

  1. by hoopoe
    Wed Sep 14, 2005 4:59 pm
    <blockquote>Ottawa and Washington talk about the world's largest bilateral trading relationship. But we really don't trade with each other, not in the classic sense of one independent company sending finished goods to another. Instead we make stuff together.</blockquote>This actually isn't accurate, as Canada doesn't export many finished good to the US (with the exception of autos, which is a unique agreement so can be excluded from your argument). We mostly export raw materials to the US, which we can sell to anyone in the world just as easily as to the US. On the other hand, the US uses our resources to manufacture finished products for export here. This is not working together, it is rather using us a 30+ million person market for your finished products, and it is common knowledge that an economy grows far more economically by value added manufacturing than by raw materials. You also seem to be ignorant of the fact that it is increasingly American companies who own almost entire industries here who eventually send their profits to the US. This is not working together, this is the US using Canada for its own benefit without regard for us at all. <p><blockquote>We also share integrated energy markets; dip into the same capital markets; service the same customers with an array of financial services;</blockquote>We don't not share an integrated energy market, Canada exports energy to the US and does not import any from you or anyone else. Again, these companies are mostly US owned and send their profits to the US. While there is value added to this product, these US companies are threatening to move the processing (especially of oil sands products) to the US. Our capital markets are entirely separate from yours (we have our own stock exchanges and banks for now), although our banks are increasingly looking to invest our money outside our country. Tell me, which Canadian company is it that is providing financial services to Americans on the scale Americans are to Canadians (there is not one single Canadian credit card company, they are all US owned) and I can't think of one investment house that does major business in the US. <p><blockquote>But we don't sell cars to each other. We build them together.</blockquote>Again, we don't not build cars together. Canada ship raw materials to the US where you manufacture the parts, ship them back to Canada where they are assembled, and then export them back to the US. The only reason we have any of your assembly plants in Canada is because someone in Canada actually had the foresight and guts to demand that in order to get access to a 30+ million market (the size and education level of California by the way) US companies had to at least assemble them here. <p>A growing number of Canadians are concerned at the level of American influence and outright ownership of this country. By the way, Canadians get far more news of your country than you do of Canada and as such I believe we have a far greater grasp about what is happening south of the border than you realize. Also, Canadians are tired of this America as our friend approach. The fact is Americans have always treated Canada as if they had some God given right to it and have never respected us as a sovereign country.



view comments in forum


You need to be a member and be logged into the site, to comment on stories.




Your Voice

To post to the site, just sign up for a free membership/user account and then hit submit. Posts in English or French are welcome. You can email any other suggestions or comments on site content to the site editor. (Please note that Vive le Canada does not necessarily endorse the opinions or comments posted on the site.)

canadian bloggers | canadian news