II. Issues and Challenges A. Economic Ties 1. The free market system has helped the United States and Canada build productive economies. a) United States has the world’s largest economy and is a leader in the world’s economy. b) U.S. = chemicals, farm products, manufactured goods, raw materials, metals, cotton fiber, etc. c) Canada = seafood, timber products, etc. d) Both are big importers. 2. U.S. and Canada support free trade.

II. Issues and Challenges a) They support the removal of trade restrictions, or barriers, so that goods can flow freely among countries. b) The U.S., Canada, and Mexico = North American Free Trade Agreement (NAFTA). c) Canada 80% of its exports to the U.S., 60% of its imports from the U.S. d) Canada is largest trading partner with Mexico being second. 3. The United States depends on trade to supply most of its energy resources. a) The U.S. imports oil from Canada, Mexico, Venezuela, Saudi Arabia, Nigeria, and Angola.

II. Issues and Challenges 4. Americans buy many additional products from other countries. a) The U.S. has a massive trade deficit which is when a country spends more on imports than it does on exports. 5. To sell their products in the U.S., some nations set the prices of their goods very low. a) Some countries place high tariffs, or taxes, on imports in order to protect their own industries from foreign competition. b) These practices raise the price of U.S. products abroad thus hurting American companies and American jobs.

II. Issues and Challenges 6. Canada enjoys a trade surplus which means that the country earns more from exports than it spends for imports. a) Smaller population means less energy costs. b) Export earnings have been growing. B. Global Terrorism 1. Since the beginning of the 2000s, the United States and Canada have joined other nations to deal with increasing terrorism and violence around the world. a) Sept. 11, 2001, New York and Washington D.C.

II. Issues and Challenges b) Stronger border security. 2. Despite their generally close relations, the United States and Canada sometimes differ in their policies. a) Canada opposed the invasion of Iraq in 2003. 3. The United States and Canada both have strong roles in the United Nations. a) Financial support. b) They support UN agencies that provide aid to disaster victims. c) The U.S. and especially Canada provide troops to act as peacekeepers in troubled areas of the world.

II. Issues and Challenges C. Acid Rain and Climate Change 1. Americans, and Canadians burn coal, oil, and natural gas to power their factories and run their cars. a) Air pollution b) The pollution also mixes with water vapor in the air to make acid rain, or rain containing high amounts of chemical pollutants. c) Harms trees, rivers, lakes, and the stone used in buildings. d) The U.S. and Canada have acted to stem the rise of acid rain. 2. Many people also worry about global warning.

II. Issues and Challenges a) This may lead to changing weather patterns. b) Canada has passed laws to reduce the amount of fossil fuels that are burned. c) The U.S. has funded alternative energy resources. D. Pollution Issues 1. Changing climatic conditions and a rising demand for water have lowered water levels of the Great Lakes. a) Decrease in the amount of goods shipped. b) Harm fish populations. 2. Brownfields are places, such as old factories and gas stations , that have been abandoned .

II. Issues and Challenges a) The U.S. and Canada have given money to communities, or neighborhoods for cleanup. 3. Urban Sprawl, or the spread of human settlement into natural areas, also has created difficulties. a) Loss of farmland and wilderness. b) Strains on water and natural resources. c) Destroys natural scenery.