NCPA - National Center for Policy Analysis

U.S.-Canada Trade Relations and Terrorism

July 24, 2003

If Canada refuses to take U.S. security concerns seriously, border trade between the two nations could slow down and the Canadian economy would be hit hard, says Fred McMahon of the Fraser Institute.

Trade with the United States is the lifeblood of Canada's economy:

  • Canada's trade surplus with the United States tops C$130 billion, or 12 percent of its economy.
  • In 2001, the United States supplied nearly two-thirds of Canada's imports, but bought almost 90 percent of its exports.
  • The United States has launched six times as many anti-dumping orders against Japan as Canada, though Japanese exports account for a much smaller percentage of trade.

Protecting the border from potential terrorist activity is a high priority of the Bush administration, and by October of this year U.S. Customs wants notice of the contents of all commercial shipments to the United States -- four hours for trucks, 12 for rail and air and 24 for marine shipments.

The Canadian government, however, has so far refused to address important security issues along the border, and some experts fear that the United States will use Canadian avoidance of their demands as a reason to slow down cross-border traffic, a move that would damage the Canadian economy.

"The Canadian government must stop risking Canada's economic future and start taking serious measures to protect Canadians and Canadian trade from the terrorist threat," says McMahon.

Source: Fred McMahon, "The High Cost of Waffling," Fraser Forum, March 2003.


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