Canada and the United States are each other’s largest commercial partners. Bilateral trade between the two countries, which amounted to well over 110 billion dollars worth of goods and services in 1984, is greater than the United States combined bilateral trade with both Japan and the European Community.’ Furthermore, they are each other’s greatest source of foreign investment. The United States has over 52 billion dollars invested in Canada, 2 while Canada has approximately 9 billion dollars in direct and portfolio investment in the United States.
As a result of these trade and investment activities, the economic and fiscal policies of each country have a strong effect in the other.4 Despite this, Canada and the United States have not entered into a legally enforceable, comprehensive, investment or trade agreement. This has left both sides virtually powerless to take remedial action in the face of growing trade and investment disputes. This Article examines some of the more recent problems involving Canadian-United States trade, and proposes a legal framework within which to formulate a comprehensive trade and investment agreement.
Saul Aronson