Lessons for India from U.S.-Canada dispute | The Hindu Editorial

By The Hindu

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The U.S.-Canada trade dispute has a few sharp lessons for India. The two economies have been deeply economically integrated since at least 1965, when they established free trade in automobiles and their parts. This then widened into a full-fledged free trade agreement in 1989, which was expanded into the North American Free Trade Agreement (NAFTA) about five years later. The economic integration between the U.S. and Canada has steadily continued and, by all accounts, has worked well for both economies. The target for the much smaller Canadian economy was to achieve economies of scale by producing vast amounts of a few products. According to Nobel laureate Paul Krugman, Canada accounts for 70% of the oil refined in the American Midwest, and supplies 60% of the nation’s aluminium. It also supplies nearly all the types of lumber used in U.S. residential construction. Yet, despite this long and fruitful trade partnership, their economic relationship has fallen to a new low. Canada pulled o

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