With the onset of the North American Free Trade Agreement (NAFTA), the United States - Canada trade partnership is one of the largest economic relationships existing between two nations. The implementation of the Free Trade Agreement (FTA) with the United States in 1989, followed by NAFTA in 1994, provided a strong environment for freer regional trade. As a result, $1.2 billion now flows across the United States - Canadian border. Thirty-seven states count Canada as their number one foreign customer and Canada is the most important destination of exports for most of the states along the border as well as the northeast and central U.S., and as far south as Missouri and Georgia. Twenty-three states sent more than one-quarter of their exports to Canada in 2003. (www.canadianembassy.org)
Despite the slowdown in the U.S. economy, the trade relationship remains strong. In March of 2003, Canada’s International Trade Minister noted that “The Canadian economy successfully weathered the recent slowdown in the world economy... [and has] successfully withstood the effects of the U.S. slowdown since 2000." Consequently, in 2003, two-way trade in goods and services surpassed $441.5 billion, making the U.S.–Canada trading relationship the largest in the world. (www.canadianembassy.org)
The proximity and similarities of the two countries provide an excellent environment for this relationship to continue to prosper. Canada has a population of roughly one tenth that of the Unites States and its business environment is more similar to the United States than any other third world country. Ninety-percent of Canadians live within one-hundred miles of the Canadian border. Therefore, Canada is the most logical choice for United States export-ready firms.