Final answer:
Canada has strong economic links with the United States, with the two countries being each other's largest trading partners. Trade between them is influenced by factors such as currency exchange rates. The North American Free Trade Agreement (NAFTA) has further facilitated economic ties by eliminating trade barriers and establishing rules for trade disputes.
Step-by-step explanation:
Canada has strong economic links with the United States. The two countries are each other's largest trading partners, with more than 80% of Canadian exports going to the United States and 70% of imports to Canada coming from the United States. The economies of both countries are closely interconnected, with factors such as currency exchange rates affecting trade between them. For example, when the Canadian dollar is strong, Canadian goods become more expensive for Americans to purchase, leading to a decline in Canadian exports to the United States.
Another important economic link between Canada and the United States is the North American Free Trade Agreement (NAFTA), which eliminated tariffs and trade barriers between the two countries. NAFTA has provided Canada with more secure access to the US market and has facilitated trade in various sectors, including agriculture, energy, textiles, and automotive trade. The agreement has also established rules for settling trade disputes.
In recent years, the decline in the value of the American dollar has affected economic links between Canada and the United States. The strong Canadian dollar has made Canadian goods less affordable for US consumers, leading to a decline in Canadian exports and even the relocation of some industries back to the United States.