How The Canadian Economy Is De

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The Canadian economy is determined largely by the United States economy threw the North American Free Trade Agreement (NAFTA) and the Free Trade Agreement (FTA). The North American Free Trade Agreement was an agreement that came into effect on January 1,1995 which involves Mexico, Canada and the United States of America. This agreement is said to produce 1 billion to 3 billion dollar gains in each country. NAFTA ensures that a certain amount of goods produced and traded between the three countries has to have a minimum percentage of its parts produced in North America. The Free Trade agreement is between the United States and Canada. The Free trade agreement came into effect in 1989 even though three fourths of trade between Canada and the United States was already free. This agreement to Canada is huge because it set up a free trade zone between the U.S and Canada, which is the largest free trade zone in the world. The Free Trade agreement is huge to Canada because 20 per cent of Canada’s GDP comes from exports to the United States. This agreement eliminated “all trade restrictions such as tariffs, quotas, and non tariff barriers.” The Canadian economy gains access to the U.S economy that is ten times its size. While the U.S economy will gain the lower-priced Canadian goods. These two agreements show how much the Canadian economy relies on the United States economy and threw these two agreements the Canadian producers can export and import U.S goods easily and at an affordable and profitable price. In this paper I will show you how the FTA and the NAFTA help the Canadian economy export and import into the U.S economy and will show you how much the Canadian economy needs the American economy to do business. Why are the FTA and the NAFTA important to Canada? Considering that the United States is Canada’s most important country to trade with it only seems logical that the Canadian economy would benefit from free trade that the FTA and the NAFTA give them. The FTA eliminated many things and one of those things was Tariffs. Under the FTA, one group of tariffs was eliminated on January 2, 1989 another group in 1994 and all the rest of the tariffs were removed in 1999. By eliminating the tariffs the goods that weren’t being traded before between Canada and the U.S are now b... ... middle of paper ... ...rican consumers to sell their product to and the Canadian industries rely on the goods that they import from the U.S. Take for example the Canadian auto sector without the high U.S demand for their products many of these auto industries wouldn’t be as profitable as they are now. The Canadian auto sector sells 87 per cent of its product to the U.S that is the highest percentage in the world. With major U.S corporations invading Canada it is just seems that most of the chains in Canada are American owned. Everything in Canada seems to be interconnected with the U.S and because of the high percentage of trading that these two countries do, when the Canadian economy experience a boom it is due to the fact that the U.S economy is also experiencing a boom as well. When you compare the TSE and the Dow Jones the same usually occurs, when the Dow Jones increases so to will the TSE. As you can see the Canadian economy needs the U.S economy, the two have become interconnected. The Canadian economy needs the high population and the high incomes that the U.S has to offer. While the U.S economy needs the Canadian auto sector and the fast natural resources that the Canadian economy has to offer.
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