As the new year begins, it is always interesting to take stock of things to come. This is especially true for trade between the United States and Canada. A new administration has been installed in Washington, which has said it will focus on its current trading relationships around the world. Canada stands to benefit from some of the views expressed, particularly in terms of energy self-sufficiency and possibly further bilateral trade. Canada has only 10 per cent of the population of the United States, but the trading relationship means more than the number suggests. In effect, both countries are joined at the hip, with 75 per cent of Canada’s population living within 100 miles of the U.S. border.
Canada and the United States are NAFTA partners and participate in a range of multilateral organizations including the UN, NATO, the G7, OAS and APEC. Both countries are each other’s largest trading partners - in fact, the largest in the world - with two-way trade of more than US$690 billion in goods and services in 2015. That represents $2.4 billion in goods and services every day. The U.S. trade deficit in goods for 2015 was US$15 billion, but its surplus with Canada in services reached US$27.1 billion. Canada buys more from the United States than does any other nation, including all 28 countries of the European Union combined, with a trade deficit in that relationship for the U.S. of around US$200 billion. Canada is also the number-one purchaser of goods from 38 states. Finally, the United States is the most important destination for Canadian direct investment abroad, which totalled $448 billion in the U.S. in 2015.