Trade and Investment
The United States and Canada share the world’s largest and most comprehensive trading relationship, which supports millions of jobs in each country. Canada is the single largest foreign supplier of energy to the United States. Canada is the third largest holder of oil reserves after Saudi Arabia and Venezuela and is the only non-OPEC member in the top five. Canada and the United States operate an integrated electricity grid under jointly developed reliability standards. Uranium mined in Canada helps fuel U.S. nuclear power plants.
The North American Free Trade Agreement (NAFTA), signed by the United States, Canada, and Mexico (the Parties), entered into force on January 1, 1994. The United States entered into negotiations with the Parties seeking to update and rebalance the NAFTA in August 2017. The United States-Mexico-Canada Agreement (USMCA) was signed on November 30, 2018. The Agreement is a mutually beneficial win for North American farmers, ranchers, businesses, and workers that, once implemented, will create more reciprocal trade with Canada and Mexico. The Regulatory Cooperation Council seeks to stimulate even more trade by increasing bilateral regulatory transparency and cooperation and eliminating unnecessary differences and duplication that hinder trade and investment.
Canada and the United States have one of the world’s largest investment relationships. The United States is Canada’s largest foreign investor, and Canada is the second largest foreign investor in the United States. U.S. investment is primarily in Canada’s mining and smelting industries, petroleum, chemicals, the manufacture of machinery and transportation equipment, and finance. Canadian investment in the United States is concentrated in finance and insurance, manufacturing, banking, information and retail trade, and other services.
U.S. defense arrangements with Canada are more extensive than with any other country. The Permanent Joint Board on Defense provides policy-level consultation on bilateral defense matters. The United States and Canada share North Atlantic Treaty Organization (NATO) mutual security commitments, and U.S. and Canadian military forces cooperate on continental defense within the framework of the binational North American Aerospace Defense Command (NORAD).
The United States and Canada work in partnerships within, at, and away from our borders to achieve enhanced security and accelerate the legitimate flow of people, goods, and services between our two countries. The effort also includes collaboration in areas such as counterterrorism, aviation and maritime security, health security, visa screening, trusted traveler and trusted trader programs, emergency management, critical infrastructure protection, and cybersecurity. Extensive law enforcement ties include collaboration in risk assessment/analysis, incident management, and coordinated messaging. Successful joint law enforcement programs with Canada include the Integrated Border Enforcement Teams (IBET), Border Enforcement Security Taskforces (BEST), and the ShipRider Integrated Cross Border Maritime Law Enforcement program. The Cross Border Crime Forum (CBCF), chaired by the U.S. Attorney General and the Secretary of Homeland Security with Canadian counterparts, meets regularly. More recent efforts include improvement of cross-border law enforcement radio interoperability.
U.S. Customs and Border Protection (CBP) conducts preclearance operations at eight Canadian airports, allowing air travelers to complete customs and immigration procedures before boarding their flight to the United States.
The United States and Canada cooperate to resolve and manage transboundary environmental and water issues. A principal instrument of this cooperation is the International Joint Commission, established under the 1909 Boundary Waters Treaty. Under the Columbia River Treaty, Canada and the United States jointly regulate and manage the Columbia River as it flows from British Columbia into the United States. The two countries cooperate on a range of bilateral fisheries issues and international high seas governance initiatives, and are both founding members of the Arctic Council.
The bilateral Clean Energy Dialogue is charged with expanding clean energy research and development, developing and deploying clean energy technology, and building a more efficient electricity grid based on clean and renewable energy. These efforts will reduce greenhouse gases and combat climate change in our shared air environment. Canada is an ally of the United States in international climate change negotiations. Canada participates in the multilateral Major Economies Forum on Energy and Climate; the Asia Pacific Partnership on Clean Development and Climate, which aims to accelerate clean energy technologies in major industrial sectors; and the International Carbon Sequestration Leadership Forum, which researches effective ways to capture and store carbon dioxide.
Please visit energy.gov for more information on the Clean Energy Dialogue.
The United States has been an Arctic nation with important interests in the region since the purchase of Alaska from Russia in 1867. At that time, national security and economic development were key U.S. interests. While this remains true today, significant changes in the international political arena, environmental, scientific and technological developments, and increasing global interdependence have created new priorities and opportunities for the United States and the other Arctic nations.
The United States and Canada share similar goals and concerns in the Arctic. Our two countries work together through international fora such as the Arctic Council to promote the viability and socio-economic well-being of Arctic communities, and both nations support scientific research and international cooperation in pursuit of these goals.