The Canada-U.S. trade and investment partnership
Canada and the United States enjoy an economic partnership unique in the contemporary world. We share one of the world's largest and most comprehensive trading relationships, which supports millions of jobs in each country. Since the implementation of the Canada-U.S. Free Trade Agreement in 1989, two-way trade has tripled. Under NAFTA, growth in bilateral trade between Canada and the U.S. has averaged almost 6.0% annually over the last decade. In 2006, our bilateral trade in goods and services was $577 billion, with over $1.6 billion worth of goods and services crossing the border every single day.
Canada's trade with the United States is equivalent to 53% of our GDP. The United States represents roughly 4/5 of Canada's exports and over 1/2 of our imports. Canada, in return, represents 22.2% of America's exports and 16.5% of its imports. To date, Canada is the number one foreign market for goods exports for 36 of the 50 states, and ranked in the top three for another 4 states. In fact, Canada is a larger market for U.S. goods than all 27 countries of the European Union combined, which has more than 15 times the population of Canada.
Canada and the U.S. have also one of the world's largest investment relationships. The United States is the largest foreign investor in Canada and the most popular destination for Canadian investment. In 2006, U.S. direct investment in Canada was worth more than $241 billion USD, while Canadian direct investment in the United States was close to $197 billion USD, which makes Canada the 5th largest investor in the U.S., accounting for 8.9% of all Foreign Direct Investment (FDI) in that country.
Almost all our exports and imports cross the Canada-US border without incident, a remarkable achievement for a trading relationship worth almost two billion dollars a day. Our two countries, however, do maintain key differences in economic policy, and respond in different ways to world economic conditions and the global free trade agenda. In cases where we have not been able to resolve our differences through consultation, we have relied on WTO and NAFTA dispute settlement procedures. Canada believes very strongly in a rules-based trading system with clear procedures for solving disputes.
