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Due to Canada’s geographical location, good relations with the USA was almost mandatory, it was even argued in the past that Canada was a cousin of the United States, and at one point, many Canadians even believed that Canada was probably better off joining America as a whole. It is evident that these two countries are actually closer than any other countries with bilateral relationships. Although there have been strains and enormous challenges in the history of these countries, the two always had some sort of ties between each other. Canada-US relations have greatly helped to achieve a greater sense of autonomy in Canada through Canada’s announcement to maintain good relations with America, the Great Depression, the Auto Pact, and NAFTA.During the First World War, Canada and the US were still skeptical about each other, especially because Canada was fighting as part of Great Britain, while the US remained neutral. However, Prime Minister Robert Borden quickly assured the US that Canada wanted no unneeded conflict between the 2 countries and that maintaining good relations was a priority. This probably eased tensions, as the US had not yet eliminated the probability of an attack on the US by Canada or Great Britain. Trade between Canada and the US was also very low at the time, population in Canada was only 3.7 million people, whilst America had almost 40 million. This probably scared Canadians because after the First World War, the US was seen as a dominant power. However during the postwar period between 1920-1930, Canada and the US were starting to become very close friends. This was important for both countries because by having good relations with each other, it meant that less money would have to be spent on maintaining border control, and so both countries eventually eliminated the probability of cross-border conflict. Good relations also meant that trade between the two countries would be increased, and therefore their economies would also be boosted. This proved to be true, as America passed the Underwood Tariff as part of the Revenue Act of 1913. This Act was meant to increase competition in US markets, it decreased tariffs on most items, and added many items to the free list such as steel rail, iron ore, agricultural equipment and many more. This Act benefitted Canada especially because at the time, Canada was a very small country, with not alot of influence on anything but with this Act, trade between the two countries took off and Canada’s economy was starting to rise. The Great Depression was a dark time in history, but its important we learn about the impact it had on Canada and why it occurred. The Great Depression really wasn’t caused by just one event in particular, but a series of unfortunate events that all just seemed to occur at the same time. One of the bigger causes of the Great Depression however, was because of the US’s decision to enact the Smoot-Hawley Tariff Act of 1930. This tariff took US tariffs to record levels, and dealt a devastating blow to Canada especially because of their dependence on Canada-US trade, in fact about a third of Canada’s GNI (Gross National Income) was from exports, mostly to the US. Between 1929 and 1933, Canada’s Gross National Expenditure (overall public and private spending) fell by 42%. By 1933, 30% of the working populations lost their jobs, and one in five Canadians had become dependent upon government relief for survival. The unemployment rate would remain at about 12% until the start of the Second World War in 1939. Canada responded quickly to this, raising their tariffs twice, and tried negotiating with the US to better improve market access, but with no avail. Things got better however, when the US elected a new president, Franklin Delano Roosevelt. Prime Minister R.B. Bennett met with Roosevelt and the two leader promised to increase trade over time. The 1934 Reciprocal Tariff Act was that promise, it lowered US tariffs by up to 50% and was the first decrease in US tariffs in 13 years. After this reduction, another subsequent reduction took place under the 1938 Reciprocal Tariff Act, which once again increased trade.The Auto-Pact, formally called the Canada-US Automotive Products Agreement, was a Canada-US agreement which was created with the purpose of creating a bigger, better market for the auto industry and for Canada to have a bigger share of this industry. This agreement was especially beneficial to Canada because Canada’s automotive industry was highly inefficient. Production rates in Canada were almost half of US levels, industry wages were about 70% lower than the US, and Canadian buyers had much less choice, whilst also paying a lot higher than their American counterparts. It was clear that if Canada didn’t do something about this, the auto industry would collapse very soon. The Auto Pact was a solution to this problem, it lowered Canadian manufacturing costs by manufacturing fewer product models, but with longer production runs. Canada and the US had different opinions on the agreement. Canada wanted to set conditions that would safeguard the growth of the industry in Canada, while the US sought a free-trade agreement. After several negotiations the end result was a managed trade agreement in which only certain auto producers would benefit and safeguards on the growth of the Canadian auto-industry. The growth of the Canadian auto-industry was swift, in only 5 years, Canada’s $700 million dollar trade deficit with the US turned into a trade surplus. This angered the US because they saw the trade surplus as competition and almost cancelled the agreement because of this. However, trade between the two countries eventually skyrocketed, even with disagreements. The auto Pact greatly contributed to Canada’s automotive industry and provided jobs to about 100,000 Canadians at the time.Relationships between Canada and the US were once again strengthened when NAFTA came into effect in 1994. NAFTA, or the North American Free Trade Agreement was an agreement between Canada, the US, and later Mexico, which was made to increase trade and investments between the three countries. NAFTA not only created one of the most promising free trade agreements in history, but it also created the world’s largest free-trade area, taking up practically the whole of North America. The whole idea of NAFTA was brought up by president Ronald Reagan in 1979 but at the time, both Canada and Mexico were not interested in this deal because they were both wary of US dominance.

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