The Automobile Trade between Canada and USA

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Canada and United States Automobile Trade Abstract The Automobile trade between Canada and USA holds relevance to both countries and their economic prosperities. The trade between the two neighbors became more pronounced after the signing of APTA in 1956. Following that further agreements like FTA which later became NFTA lifted the tariff from other goods as well. This paper reveals how the free trade allowed America and Canada to work in tandem to import and export vehicles across the border and to other places in the world. The impact of trade agreement made the country's auto sectors and GDP enhance several folds. Canada gained a lot more from the trade as its economy needed a bigger boost than America. In the production of automobiles, America is the dominant player in making the parts where as Canada assembles it into a vehicle. The trade also paved way for Vertical Specialization as is discussed in the paper. The trade between the two nations saw a downward drift following the 2008/2009 energy crisis that majorly targeted the United States. Since the Canadian market is linked to America's market, it also became a victim of crisis in the auto industry. Despite these troubles, both the nations have attempted to stabilize the problems and still carry on trade and thus progress their import and export quantity as well. Overall, this paper emphasizes the importance of the joint collaboration of both countries in automobile industry and its success. Introduction

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