Pros and Cons of Canada’s Relationships With US

Background information

Although the relationships between the US and Canada have remained cordial for the last three decades thereby working for the benefit of the two countries, it has come with its own share of downsides emanating from disputes, diplomatic differences, and trade imbalances that emerged from time to time almost straining their relations. The purpose of this paper is thus to prove that bilateral relations have largely been beneficial for the two countries. The US-Canada relationship is the closest and most extensive bilateral relationship globally. These cordial relationships have been going on over time despite the changes of administration over the last three decades. Even the entry of the conservatives in power who insisted on acting independently from the United States could not severe the close ties that existed between the two.

The two countries in the past have cooperated in international security and political matters, diplomatic affairs, bilateral trade, and through international organizations. It is true as the critics of the bilateral relationships have argued that the two countries are bound by strong diplomatic differences which sometimes threaten to tear away the relationship. A case in point is the differences in foreign policy that arose over Iraq where the true failed to agree on the approach to be adopted. However, this could be taken as insignificant considering that the two have been undertaking a joint cooperative exercise to combat global terrorism, especially in Afghanistan.

Areas of cooperation

Commercial disputes have riddled the bilateral trade cooperation sometimes leading to diplomatic confrontations. These have been caused by difficulties in negotiations on trade items which have included agricultural items, natural resources, and the entertainment industry. This has adversely affected bilateral trade in these areas of cooperation thereby making cooperation and trade in the respective areas very difficult. However, these constitute a very small proportion of the countries’ trade volumes. For example, the countries engage in heavy cooperation in the energy sector which is emerging as one of the most important areas of cooperation. Other important areas have included environmental conservation through management of solid waste, monitoring of the quality of air, and protecting the border waterways from pollution.

Politically the countries keenly follow each other policies on the environment, trade issues, and cross-border matters which affect their territories. The countries lawmakers also examine each other solutions relating to fiscal policies and power-sharing by their federal government. This is because they are very similar in terms of political structures. As we mentioned earlier, the two countries are the world’s greatest trading partners. As result trade relations are very important to the two of them hence calling for closer trade ties between the two. The countries enjoy close diplomatic ties that are cemented along with the countries’ common interests in both domestic and international political matters. These are manifested in the joint efforts to fight global terrorism as their cooperation in Afghanistan. Joint anti-terrorism military exercises and ventures have intensified especially after the September 11 attacks in the US.

Economic relationship


While commercial disputes have been the order of the day threatening to cripple down the comprehensive trade relations, their trade relationship as I mentioned earlier is the largest in the world. As a result, it has formed a huge proportion of the countries’ economies. The bilateral trade forms a huge lifeline of the country’s citizens employing millions of people in the two countries. For example, in 2007 alone, the volume of trade surpassed $560 billion. Canada has also been a leading trade partner for 36 of the 50 US states thus showing its important role in the US economy. Its market for US goods has been said by analysts to be larger than the entire European Union.

The two countries have as a result formed bilateral trade relations to boost their trade relations further since 1989 with the signing of the US-Canada Free trade Agreement (FTA). The relevance of this agreement was outlived later by the coming in of The North America Free trade Agreement (NAFTA) which commenced in 1994. This was inclusive of Mexico thereby bringing the total population under the agreement to 450 million. The purpose of the agreement was to minimize trade barriers and harmonize trade rules among the member countries. The agreement has also helped to resolve long-standing trade feuds and barriers that were causing friction among the countries such as unfair government procurement rules and liberalization rules in the sectors which include energy, agriculture, financial services, and investments. The implementation of the agreement saw the growth in bilateral trade between the US and Canada sour up by 265%.

In agriculture, the US is the largest market for Canada’s agricultural produce accounting for 55% of the output. This had however been slowed down by the US restrictions due to the outbreak of BSE, mad cow disease in 2003 but later resumed in 2007.

Likewise, Canada happens to be the most important US market for agricultural products ranging from fresh fruits and vegetables. The energy sector has also been another benefit for the bilateral trade where they have the largest partnership globally. Canada is the largest supplier of energy resources to the US through the provision of natural gas and oil. The electricity grid is also integrated to meet the fluctuating demands of the two countries.

Although critics point out trade disputes as to the biggest bottleneck for bilateral trade between the two countries capable of derailing bilateral relationships, the disputes only affect about 2% while 98% of the trade proceeds smoothly5. Most of those disputes are however resolved diplomatically through consultation while highly contentious issues are escalated to the World trade organization for arbitration. Such contentions as the patent laws relating to publishing and US trade remedy laws have been negotiated through the intervention of the WTO and NAFTA.

While the public opinion is for the view that bilateral trade relations would divert trade from the two countries, only insignificant trade has been lost while trade has remained on an upward swing. The bilateral trade agreements have come out quite successfully in encouraging trade liberalization among members. Bilateral trade agreements have indeed proved easier and faster to negotiate as opposed to multilateral trade agreements which are quite complex and take ages to conclude. This is because fewer parties are involved in reaching the agreements.


Poor policy frameworks governing the bilateral relations between the US and Canada have at times threatened to diminish the trade instead of enhancing the trade relations between the two countries. This is a huge threat to the welfare of the countries citizens who highly depend on the trade if the trade between the two is affected adversely. Any such lag or decreased trade volumes would result in rampant loss of employment and a decline in incomes which could be catastrophic to the people’s welfare. For example, the removal of trade barriers between the two partners has the effect of disadvantaging third party partners from other countries which causes production inefficiencies by the countries firms. This is because these countries lose competitiveness to domestic suppliers whose products have no trade restrictions. The absence of external competition causes the domestic companies to be inefficient in production which impairs the countries economic welfare.

Another key disadvantage is that in those sectors where the countries are party to external agreements with other economic partnerships with larger influence, there are no effective frameworks of trade liberalization in those sectors. This impairs trade in those sectors between the countries leading to sluggish development of trade in those sectors. This causes significant rifts in bilateral trade between the countries and sometimes potential commercial conflicts between the countries.

Bilateral trade agreements have complicated the trade systems between Canada and the US thereby increasing transactional costs for business operations. To prevent goods from the third countries from accessing the local market through any of the two countries, complex rules of origin are imposed by the two countries which undermine trade by increasing the cost of transactions. The coming of NAFTA which enjoined Mexico only complicated trade between Canada and the US due to the existence of a different set of rules thereby making enforcement and compliance to these rules difficult. The different dispute settling mechanisms existing between the countries also became detrimental for the member countries.

Defense relationships


While the bilateral defense relationship between the US and Canada has come under sharp criticism from Canada’s citizens who view it as a threat to the territorial sovereignty, a lot of benefits have been realized from the military cooperation. The bilateral relations between Canada and the US date back to 1958 when the two countries signed the NORAD agreement. This was aimed at defending the US- Canada airspace also encourages joint development of aerospace technologies. Just after the September 11 attacks, there were talks on plans to expand the military cooperation to integrate land and sea. Further amendments were later carried out to allow joint military training, planning, exercises and sharing of information.

In addition, Canadian firms have benefited immensely from the award of contracts in the countries’ joint production of military aircraft. Plans by the pentagon to purchase military aircraft from Canadian defense companies were also a huge benefit accruing from their bilateral relations. The pulling of resources together towards common military production ventures came with huge savings besides creating an important opportunity for the two countries to advance their technology as a result of shared knowledge and technical expertise.

The bilateral defense relations have also led to better management of the countries’ foreign relations. For example, Canada launched Operation Apollo in Afghanistan in support of the United State’s Operation Enduring in the fight against terrorism. These were meant to counter the activities of al Qaeda and the Taliban in the region. Besides human resource contribution, Canada also contributed equipment and humanitarian aid towards the course. This has helped Canada to build a strong image in the international arena.

Joint border surveillance has also been revamped especially after the September 11 attacks. The two countries signed The Smart Border Declaration in 2001 to boost border security and increasing efficiency in border crossings thereby helping to secure their territories from terrorist infiltration. Infrastructure improvements were carried out at border crossings and security was tightened in seaports and airports. The ultimate effect has been a marked enhancement of security in the two countries.


While joint military cooperation has brought enormous benefits for the two nations, the missile defense system has received reservations from analysts who feel that it might result to new arms race. Canada as a result was in strong opposition of the plan thereby causing rift in the bilateral relations. Polls conducted in Canada indicated that majority of the Canadians were in opposition of the plans. This led to the Canadian government to shelve the plan.

Another disadvantage of joint military cooperation is the huge commitment of the countries’ resources to military expansion. For example, the 10 years joint Strike Fighter Program which commenced in 2002 has cost the Canadian taxpayers $150 million annually. This amounts to the huge commitment of public funds to non-developmental projects which tends to strain the taxpayers who want to see their social and economic welfare improved. The disinvestment of public resources harms the public as it happens at the expense of the provision of essential services to the public. The huge military expenditure in Afghanistan has also exposed Canada’s misplaced priorities when compared to the country’s expenditure on humanitarian aid. The county has been expanding its military budget in Afghanistan while little change has been experienced in its expenditure on humanitarian aid indicating a bias towards expanding its foreign policy.

Cultural relationships


While it is that the Canadian cultural policy is largely inward-looking and seeks to protect Canada from American influence, the bilateral relationship between the two countries has led to further advancement of the Canadian culture. Critics of the bilateral cultural relations argue that it is weakened by the Canadian tendency to assert its cultural sovereignty and identity through subsidies and imposition of taxes on the US cultural products. However, this is insignificant considering the huge cultural exchange that takes place between Canada and the US. Canada for example has always provided a huge market for the American entertainment industry. Similarly, the US market has also provided an important market for the Canadian cultural products.

The Canadian government recognizes the American bullish influence in the Canadian culture. As a result, it has emerged as a strong defender and custodian of the Canadian culture through legislation, the establishment of national cultural institutions, regulations, subsidies, and other forms of restrictive support for domestic products. The determined government involvement has led to the establishment of a heavy Canadian infrastructure consisting of both human and physical infrastructure, artistic creativity, and public ownership and participation in the cultural sector. The realization that the American innovativeness in their cultural industry would have a significant effect on the Canadian culture led the government to increase its efforts in the development of its own technological framework. It has always been argued that the emergence of new technologies would always undermine Canada’s place in the cultural industry. However, increased investment in the domestic cultural infrastructure has led to the development of an elaborate modern cultural infrastructure which has helped Canada remain competitive in the cultural arena.


The bilateral trade and cultural relations leading to the opening up of the economy to the US industries has led to the domination of the Canadian industries by the US cultural industry. Mulcahy adds that this is manifested in the Canadians tendency to write and talk more on the US culture as opposed to the US which rarely does. He argues that this could be as a result of the American larger economy and demographic size which gives it an advantage gives Canada. In addition, the larger market share of the US cultural content relative to Canadian increases their exposure to it. American television also has a lot of influence on the Canadians as shown by opinion polls which indicate the Canadians inclination towards American TV.

The inclination of the Canadians to the US cultural industry is detrimental to the growth of their domestic cultural industry. This is due to the domination by their American counterparts which tend to suppress its content and thus discourages the development of the local content. Inferior infrastructural development as a result of competition has also been detrimental for the industry.


Relationships between the US and Canada have remained cordial for the last three decades thereby working for the benefit of the two countries. The bilateral relationships have had their own share of downsides emanating from disputes, diplomatic differences, and trade imbalances that emerged from time to time almost straining their relations. This is however insignificant considering the huge benefits that have been leaped from the relations. Thus it can reliably be argued that bilateral relations have largely been beneficial for the two countries. This can be attested by the fact that the US-Canada relationship is the closest and most extensive bilateral relationship globally.


Bureau of Western Hemisphere Affairs. “U.S.-Canada Relations.” U.S. State Department, 2008, Web.

Christopher, Maule. “State of the Canada-U.S. Relationship: Culture.” Questia Media America, Inc, 2010. Web.

E.k, Carl. Canada-U.S. Relations, Congressional Research services, 2009.

F. Ian Fergusson. CRS Report for Congress: United States-Canada Trade and Economic Prospects and Challenges. Congressional Research services Relationship, 2008.

Kevin, Mulcahy. Forthcoming. Cultural Imperialism and Cultural Sovereignty: US-Canadian Cultural Relations, American Review of Canadian Studies, 2000.

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DemoEssays. "Pros and Cons of Canada's Relationships With US." January 4, 2023.