Canada and the United States: Time to Renew the World's Most Successful Economic Partnership

What History Teaches About Free Trade, Shared Prosperity, and Looking Forward Instead of Backward

Every day, Canada and the United States exchange over $800 billion in goods, services, energy, investment, and ideas annually.

Together, we have built one of the most integrated and successful economic partnerships in modern history. Yet today, instead of strengthening that relationship, both countries increasingly find themselves arguing over trade disputes rooted in policies designed for a very different era.

It is time to stop asking how each country can win, and begin asking how both countries can prosper together, for the citizens of both countries'.

Understanding Before Negotiating

One of the first principles of successful negotiation is remarkably simple:

Before trying to persuade the other side, first understand why they hold their position.

Too often, trade negotiations begin with accusations rather than understanding. Politicians speak to domestic audiences. Interest groups defend established systems. Each side focuses on its own grievances while overlooking the legitimate concerns of the other.

Successful negotiations begin differently.

They begin by recognizing that reasonable people can have different priorities while still seeking mutually beneficial solutions.

That philosophy should once again guide Canada–United States trade relations.

A Partnership Unlike Any Other

No two sovereign nations enjoy a closer economic relationship than Canada and the United States.

Together we share:

• the world's longest undefended border;
• one of the world's largest bilateral trading relationships;
• highly integrated manufacturing;
• shared energy infrastructure;
• NORAD and decades of defence cooperation;
• increasingly connected critical mineral supply chains;
• democratic institutions founded upon the rule of law.

This relationship was never built upon one nation defeating the other. It was built upon cooperation.

Every major agreement, from the Auto Pact to the Canada-U.S. Free Trade Agreement, NAFTA, and now USMCA, recognized one central truth:

When Canada and America work together, both countries become stronger.

The Reality of Modern Trade

Trade today is no longer simply about tariffs. It is about:

• supply chains,
• energy security,
• artificial intelligence,
• advanced manufacturing,
• food security,
• national security,
• critical minerals,
• technological competitiveness.

The world has changed dramatically since many existing trade policies were created. Both countries now face increasing competition from rapidly expanding economies, particularly China and other emerging industrial powers.

Instead of competing against each other, Canada and the United States should increasingly view themselves as partners competing together within the global economy, especially in strategic areas that reduce reliance on adversarial supply chains.

Modernizing Outdated Policies

Every long-standing partnership accumulates policies that made sense when introduced but deserve periodic review. This applies equally to both countries.

Canada has supply management. The United States has agricultural subsidies, Buy American procurement rules, softwood lumber duties, and other measures that periodically create friction.

Rather than treating every disagreement as a national confrontation, both governments should ask a more constructive question:

Which policies continue serving their intended purpose, and which have simply become obstacles to future prosperity?

That conversation should occur without ideology and without political rhetoric. It should be guided by evidence.

Supply Management as One Example

One policy frequently raised during Canada–U.S. trade discussions is Canada's system of supply management for dairy, poultry, and eggs.

The system rests upon three principal pillars:

• production quotas,
• administered farm prices,
• high import tariffs beyond established quotas.

Its objectives were understandable: to stabilize farm income, ensure domestic food production, and reduce price volatility. Those goals reflected the realities of the 1960s and 1970s.

However, today's economy presents different challenges. Independent economic analyses, such as a 2026 report from the Montreal Economic Institute, estimate that supply management increases consumer costs by roughly $224–$244 per person annually (with higher proportional burdens on lower-income households), while limiting competition and creating recurring trade friction with Canada's largest trading partner.

Reasonable people may disagree about the precise figures, but the broader policy question remains: Should a system created decades ago continue unchanged if more efficient alternatives exist?

Respecting Farmers While Modernizing

Reform should never mean abandoning those who built Canada's agricultural success. Canadian dairy farmers invested in good faith under rules established by government. Many have invested their life savings in production quotas. Many planned their retirement around those assets.

Changing public policy without recognizing those legitimate expectations would be both unfair and economically disruptive.

If reform is pursued, farmers deserve:

• full consultation,
• predictable timelines,
• fair compensation,
• transition assistance,
• financing support,
• opportunities for diversification.

Good policy protects both consumers and producers. The objective is modernization—not punishment.

Looking Beyond Dairy

The larger opportunity extends far beyond milk. Imagine a broader Canada–United States modernization agreement that included:

• enhanced energy cooperation;
• integrated electricity infrastructure;
• critical mineral partnerships;
• defence procurement cooperation;
• AI and advanced manufacturing;
• regulatory harmonization;
• infrastructure investment;
• resilient North American supply chains.

Within such an agreement, reforms to sectors such as dairy, poultry, and eggs become part of a comprehensive strategy—not isolated concessions. This transforms negotiation from a zero-sum exercise into a shared investment in future competitiveness. Lower consumer prices in Canada would boost real wages for families, while providing greater predictability and market access for producers on both sides.

A Practical Path Forward

Rather than beginning with demands, both governments could establish a joint technical working group composed of officials from finance, agriculture, trade, and independent economists. Its mandate would be to evaluate consumer impacts, producer exposure, reform options, and transition strategies using transparent evidence.

A phased approach over five to ten years, combined with fair transition support for affected producers, could reduce uncertainty while allowing both countries to negotiate broader gains in areas such as energy, critical minerals, defence procurement, and regulatory cooperation.

Such an approach emphasizes that modernization is intended to benefit both Canadian consumers and Canadian farmers while also addressing longstanding concerns raised by U.S. producers.

Leadership Requires Looking Beyond the Next Election

The greatest leaders rarely focus solely on the next election. They prepare their countries for the next generation.

That often requires questioning long-standing assumptions while respecting those who built today's prosperity. It requires balancing economic efficiency with fairness. Most importantly, it requires recognizing that compromise is not weakness. It is often the highest form of statesmanship.

Renewing an Extraordinary Partnership

Canada and the United States have spent more than a century building one of the world's most successful bilateral relationships. That partnership has weathered wars, recessions, financial crises, and political disagreements. It has endured because leaders on both sides understood a simple truth: Our futures are deeply connected.

The question today is not whether every existing policy should remain unchanged, nor whether one country should prevail over the other. The real question is whether both nations possess the vision to modernize outdated policies together while preserving the partnership that has served both peoples so well.

History reminds us that the strongest alliances are not those that resist change, but those willing to adapt together. Canada and the United States have repeatedly demonstrated that cooperation produces greater prosperity than confrontation.

If both governments approach the next generation of trade discussions with respect, evidence, and a shared commitment to long-term prosperity, they can once again build not merely a free trade agreement, but the world's strongest economic partnership, one that makes North America more competitive, more secure, and more affordable for families on both sides of the border.