U.S. sneezes, Canada catches cold, but it is not much of a stretch to conclude that Canada
has placed most of its economic eggs in only one basket. Currently, 4 dollars of every 10
dollars in production of goods and services within Canada are tied inextricably to the
national market immediately to the south.
The next section of this paper will examine the U.S. political economy and will
indicate some potential danger signs on the horizon insofar as Canadian economic
interests are concerned. The following section will look specifically at U.S foreign
economic policy toward Canada, and the final section will provide some prescriptions for
how Canadian officials may maximize some of the positive trends occurring in U.S.
society and minimize the cross-border impact of some of the negative trends developing
within the U.S. political and economic systems.
A Troubled U.S. Political Economy
I once observed a bumper sticker on a car in Australia which read: “There is too
much apathy in this country, but who cares!” U.S. political, governmental and fiscal
policy currently leaves much to be desired and there may be a significant price to pay in
the foreseeable future both for the American people in general and for economic ties in
particular between the United States and Canada.
(1) Fiscal indiscipline: The federal government’s annual budget in Washington is
currently about 2.5 trillion dollars, meaning that government spending at the national
level alone is greater than the gross domestic products of every other nation on earth
except for Japan and Germany. The post-Cold War “peace dividend,” a surging stock
market, the dot.com craze, an overall robust domestic economy, and cutbacks in both
4
Convention