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Published:February 16th, 2009 14:55 EST

U.S. Report On Strategic Importance of Canada to United States

By SOP newswire

Washington -- Canada has become the most important trading partner of the United States, accounting for almost 20 percent of all U.S. trade, according to a new report by the U.S. Department of Agriculture (USDA).

The report, released September 15 by USDA`s Economic Research Service, said U.S. exports to Canada, measured as a share of the U.S. gross domestic product, have more than doubled since 1960.

In 2004, U.S. exports of goods and services to Canada exceeded combined U.S. exports to Mexico and Japan, the second- and third-largest U.S. export markets, said the report, entitled Canada:  A Macroeconomic Study of the United States` Most Important Trade Partner.

Written by USDA`s Paul Sundell and Mathew Shane, the report said Canada has become an increasingly important strategic and economic partner " for the United States.  The report said the United States depends increasingly on Canada for supplies of strategic resources such as energy, metals and lumber, and that Canada is the largest supplier of energy to America in the form of oil and oil products, natural gas and electricity.

Sundell and Shane said their report provides an analysis of the Canadian economy, focusing on its trade with the United States and the rest of the world, and evaluates Canada`s long-term growth prospects.  The authors said knowledge of Canada`s economic structure, trade patterns, and growth prospects is increasingly important in understanding the overall U.S. trade outlook, especially the export outlook for diverse U.S. industries that are heavily involved in exporting to Canada. "

The report`s release follows a visit by U.S. Secretary of State Condoleezza Rice to Stellarton, Canada, September 12 in which she praised the U.S.-Canadian relationship as very, very strong. "  During a joint briefing with Canadian Foreign Minister Peter MacKay, Rice said that even though the two countries have had their policy differences, the United States and Canada have the most active of relationships at the level of people-to-people not just at the levels of government. "

The authors of the USDA report said that it is not surprising that Canada and the United States are each other`s most important trade partner, " given their geographical proximity, open trade regimes " and other factors.

Canada`s favorable long-term economic growth, according to the report, will continue to receive a boost from expected strong U.S. growth in its gross domestic product (at 3 percent or more) for the remainder of 2006 and 2007.

The full text of the report (PDF, 36 pages) is available on the USDA Web site.

A transcript of the Rice-MacKay briefing is available on the State Department Web site.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site:

By Eric Green
Washington File Staff Writer