Trade Profile: Canada Negotiates Its Diversity

Canada's trade strategy is at the mercy of its geography. Thanks to its location, trade with the United States is unavoidable for Canada. An estimated 80 percent of the country's population lives within 100 miles of the U.S. border, meaning that its regional economies have become integrated with and reliant on those of the United States. Discussions in Canada of free trade often default to talk of whether pursuing greater economic and political integration with its southern neighbor would be good for the country. In addition, the size of Canada's territory relative to that of its population has compelled it to adopt one of the world's most decentralized political systems. Though the federal government devolves significant powers to its provincial and territorial counterparts, Ottawa nevertheless retains control of several core functions, including regulating domestic and international commerce. The resulting system of government suits the vast and sparsely populated country, but...