US and Canada Trade Balance

Here's an interesting monthly chart -- the US Trade Balance with Canada

Late last year, the US balance of trade with Canada went into free-fall -- American consumers started buying a lot more stuff from Canada than Canada bought from th US. But earlier this year, things really started to turn around.

Canadian Prime Minister Stephen Harper, naturally, would like to see that line turn down again, and Canadian exports to the US go up. Today, Harper said his good friend President Bush can count on a secure flow of oil and gas from Canada, its biggest energy supplier.

Harper emphasized the two countries' special relationship as the US Congress tightens the screws on travel across the border. Starting Jan. 1, 2008, a passport or equivalent identification is required for all people traveling to the U.S. from countries where passports hadn't been previously required, such as Mexico, Canada and parts of the Caribbean. That goes for US citizens, too.

Harper is hoping to get the US to reconsider that rule, since $1.5 billion a day worth of goods and services crosses the border between the US and Canada, and the balance, as you can see from the chart above, is definitely in Canada's favor. To further entice Bush to see things his way, Harper is arm-twisting Canada's lumber industry into agreeing to a settlement on a softwood dispute that has dragged on since 1982.

But several provincial governments and their lumber associations have complained about the agreement. According to Trevor Wakelin, chairman of the Alberta Softwood Lumber Trade Council, the agreement "is not a long-term deal, it does not provide operating certainty, and in its current form is unacceptable to most Alberta producers."

To be fair, some US lumber producers are complaining as well, but that might just be to give Harper some political cover.

And Harper should learn a lesson from Tony Blair: Bush doesn't reward loyalty in international affairs. He just expects it from others.

You can read the Bloomberg story by clicking HERE.

Sounds like a lot of tough choices for Harper.

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