Canadians never tire, and never will tire so long as they are Canadians, of considering the influence of the United States on their economic, political, and social structure. For many years past the United States has been the most important external influence on Canada. Since the war, it has become so much the predominant external influence that the traditional Canadian practice of balancing between the influence of Britain and the United States is no longer an effective procedure. Certainly in the economic sphere the United States constitutes the only real threat to Canadian independence and it will remain our chief economic preoccupation as far ahead as one can see.

The purpose of this paper is to discuss some aspects of the economic side of the relationship between the United States and Canada. In so doing I shall attempt to outline some of the main facts with emphasis on the changes which have occurred since before the war and to offer a few reflections on the meaning of these facts in terms of Canadian interests and Canadian policies.

Even the briefest examination of the facts makes it clear that our ties with the American economy have become closer and more important during the past decade than ever before. Today 60 per cent of our commodity exports go to the United States compared with less than 40 per cent before the war. Almost three-quarters of our commodity imports come from the United States compared with less than two-thirds before the war. Though foreign trade in total has been playing a gradually decreasing part in our national economic life, our business with the United States occupies just as large a part in Canadian activity as it did in most pre-war years. Canadian exports of goods and services to the United States in 1955 were equivalent to about 14 per cent of the national production, and Canadian imports of goods and services from the United States to about 18 per cent.