Trade of North America
News •
North American trade patterns offer noteworthy contrasts. Canada, with a small population but with immense resources and high productivity, has a low home consumption and depends on foreign trade more than any other developed country on the continent. The United States, on the other hand, with a vast internal market and the highest per capita consumption of goods in the world, depends mainly on internal trade, although external trade has risen considerably since World War II and now accounts for about one-fourth of its total trade. Mexico and Central America, by contrast, still have large areas where people live at a subsistence level and produce little more than goods for local trade. Production of certain metals, oil, and tropical crops, however, has expanded rapidly for sale in foreign markets.
In 1992 Canada, Mexico, and the United States entered into the North American Free Trade Agreement (NAFTA), a controversial trade pact that gradually eliminated most tariffs and other trade barriers on products and services passing between the three countries. The pact effectively created a free-trade bloc among the three largest countries of North America.
The Canadian segment
Canada’s internal trade is dominated by the provinces of Ontario and Quebec. Together they account for a large portion of the country’s manufactured goods, which they have historically shipped across Canada in exchange for fish, lumber, and fruit from British Columbia, wheat and meat from the Prairie Provinces, and pulpwood, iron ore, and fish from the Atlantic provinces. Much of Canada’s trade abroad consists of raw or semiprocessed materials—including pulp, paper, lumber, iron ore, nickel, lead and zinc, and uranium—along with red meat sent to Britain, the United States, and Japan and wheat exported to the United States, Indonesia, Iraq, and Japan. Some oil and natural gas, as well as vegetable oils, processed fruits and vegetables, and snack foods, are sold to the United States.
Until World War II, Canada traded mainly with Britain; during that time, the United States still produced a surplus of most of the things Canada raised and thus was not a major customer. Canada, in fact, bought far more from the United States than it sold to it. By the late 20th century, however, the United States had become short of metals, wood, pulp and paper, power, and water and was importing these items from its neighbor on an increasing scale. It has thus replaced Britain as Canada’s chief market. The European Union and Japan also are important customers for Canada’s metals, wood products, and wheat.
The United States segment
Internal trade in the United States is enormous, often surpassing that among sovereign states on other continents. It was long dominated by New England’s need for fuel, cotton and wool, leather, wood products, and metals; by the mid-Atlantic states’ demand for coal, oil, natural gas, iron ore and other metals, and food products; by the Pittsburgh region’s need for iron, copper, oil, and gas; by the lower Great Lakes–Lake Michigan area’s need for coal, oil, gas, iron, pulp and paper, and wood; and by the Los Angeles–San Francisco region’s demand for steel, aluminum, cellulose products, oil, and chemicals.
Traditionally, most of the other areas of the United States have traded their raw materials or semifinished goods to these major manufacturing regions, though of course there are local industrial centres of importance. Trade is concentrated in servicing, or in being served, by such large metropolitan centres as New York City, Los Angeles, Chicago, Houston, and Philadelphia. These cities also handle a great deal of American foreign trade. Southeastern ports send out cotton, tobacco, and wood products, among other commodities, and the mid-Atlantic coast ports send out wheat, corn, meat, and a wide range of manufactured products.
Since the development of the St. Lawrence Seaway, the major cities along the Great Lakes have been directly exporting the steel products, cars, airplanes, agricultural machinery, cereals, and meat for which the northern Midwest is famous. New Orleans continues as an exporter of cotton, corn, and other agricultural products from the vast Mississippi hinterland, although oil and grain now are more important, while trade from Houston’s busy port is based on oil and chemical products. Los Angeles dominates the West Coast with its sales of computer and electronic products, transportation equipment, aircraft, ships, motion pictures, and chemicals. Seattle is important for its trade in computer and electronic products, fish and forest products, and aircraft. American imports include a wide variety of products: tropical fruits, woods, fibres, and vegetable extracts, mainly from Latin America, West Africa, and Southeast Asia; oil from Saudi Arabia, Mexico, Canada, Venezuela, and Colombia; tin from Peru, Indonesia, Bolivia, and Malaysia; wool principally from New Zealand and Australia; and a wide range of motor vehicles, machines, textiles, instruments, and books from Japan and western Europe.
American trade has a worldwide distribution and impact: of its export total, about one-third goes to western Europe; roughly another one-third goes to Mexico and Canada; and more than one-fifth goes to Japan, Southeast Asia, Australia, and New Zealand. . Of almost equal importance has been the widespread influence of American foreign aid: while initially this helped American trade by being tied to the use of domestically manufactured equipment, it has become much freer and enables countries to develop their own agriculture or industry in the most satisfactory way.
The Mexican and the Central American segments
The Latin American portion of the continent includes some highly sophisticated regions, along with many as yet undeveloped areas. In Mexico’s internal trade the capital region predominates, producing most of the country’s manufactures, which are then distributed through regional cities. Mexico City consumes much of the domestically used oil piped up from the coast, the metals of the Cordilleran mines, the cotton of the irrigated central and western basins, and hemp from Yucatán. Petroleum exports became a steadily growing part of Mexico’s external trade following the discovery of vast oil reserves in the Bay of Campeche in 1972. Within a decade, petroleum sales represented by far the greatest portion of Mexican export earnings. The oil exports have given Mexico higher income, but they also have placed the country in danger of becoming overly dependent on a commodity that is subject to market fluctuations. In an effort to avoid the consequences of such dependence, the government has attempted to diversify the country’s export economy. This effort has involved expanding Mexico’s industrial base, increasing the export of manufactured goods, and augmenting the export of agricultural goods and metals.
Imports consist predominantly of manufactured goods and of parts and materials needed for Mexican industries. Machinery, vehicles, and consumer goods are the chief items. The United States has the greatest share of Mexico’s foreign trade, providing the greatest portion of the imports and exports. Since 1960, however, more of Mexico’s trade has been oriented toward Latin America. Mexico is also trying to send more winter fruits and vegetables, textiles, and leather goods to Canada.
Central America has developed a limited amount of trade. By far the greatest exports are tropical fruits, coffee, sugar, fibres, and minerals (especially from the Caribbean), which are sent to the United States in exchange for American manufactured goods. Increasingly, virtually the whole of North America is being integrated in its economic development with the growth of the United States.
Transportation of North America
Waterways
Industry has been strengthened by the ease of movement in North America. Waterways, widely used by the Indians and early Europeans, are still important. In spite of the barriers of the Canadian Shield and the Appalachians, the routes up the Gulf of St. Lawrence, the Hudson Strait, Chesapeake Bay, and the Gulf of Mexico permitted the swift development of coastal ports and allowed the continental interior to be opened up. The Mississippi-Ohio and the Great Lakes–St. Lawrence waterways drew navigation into the heartland. Connecting these two systems, the Chicago Sanitary and Ship Canal, linking the Illinois River with Lake Michigan, and various Ohio River–Lake Erie canals provided a tremendous network, extended by the Erie Canal to the Mohawk-Hudson waterway and by the Intracoastal Waterway to river ports of the Gulf of Mexico. The St. Lawrence Seaway, which overcame the Lachine and International rapids and Niagara Falls, has made ocean ports of inland cities.
Railways
Railways soon offered the challenge of more direct and speedy access than the waterways. Developed principally from bases along the Atlantic Seaboard, they made the most of gaps through the Appalachians, debouched on the Great Lakes or Ohio River at Buffalo and Chicago and Pittsburgh, and pushed on to the Mississippi River at St. Louis and St. Paul–Minneapolis, Minnesota. Other lines were then laid across the Great Plains, and, utilizing passes through the Cordilleras, the railways built terminals at San Francisco, Seattle, and Los Angeles. Most of the Western railways were given large land grants to encourage immigrants to settle along them, while low promotional rates on long-haul traffic developed transcontinental trade. In Canada the transcontinental railways linked up the Maritime Provinces with the St. Lawrence–Great Lakes, and thence, from Montreal and Toronto, they crossed the shield to converge at Winnipeg; there, reinforced by large land grants, they fanned out across the prairies, to be drawn together by the Fraser River down to Vancouver.
Mexico overcame difficult grades in building a railway from Veracruz to Mexico City and added extensions north and south along the Gulf Coast, with lines into Monterrey and to Mérida. Eventually lines were pushed through the Sierra Madre Occidental at Guadalajara to the Pacific coast.
Railroads had a tremendous impact on urban development. Among the major railroad cities are New York City, Chicago, St. Louis, and Los Angeles in the United States and Montreal, Winnipeg, Toronto, and Vancouver in Canada. Mexico City dominates the network in Mexico. Railroads led to the rise of east-west over north-south lines and rapidly displaced most waterways, particularly the Mississippi. The main economic axis in the United States lies along the railway belt from New York to Chicago. Inadequate overall planning in major metropolitan regions has resulted in crucial transportation problems, however, and inner-city rapid-transit systems often have fared no better.
Roads
North America’s road network first began to offer serious competition to the railways after World War I. The U.S. government has since financed more than 300,000 miles (483,000 km) of transcontinental highways, including more than 40,000 miles (64,000 km) of limited-access multilane roads. In Canada the Trans-Canada Highway offers a coast-to-coast through route, while from Mexico the Pan-American Highway links the countries of Central America. These highways have enabled trucks to take over short-haul routes from railways, and the railways have concentrated on long-haul, low-cost routes. Truck and train, however, have been integrated in the “piggyback” containerized carriage. The automobile, meanwhile, has displaced commuter trains in many cities, and radial and ring routes have helped draw the cities far out into the countryside. The attendant problems of congestion and pollution have approached the critical stage in many cities.
Air transport
Air transport has taken most of the long-distance passenger traffic from the trains, and airfreight has cut into truck-freighting trade. Intense overall competition is thus a recurrent feature of North American transportation systems. Airways have tended to centre on the larger cities and to magnify their importance, although the rise of the “hub” system of air transport has helped to diversify air routes. Links with Europe and Asia make North America the chief crossways of air routes in the world. The United States alone accounts for some two-fifths of all the world’s passenger air traffic, and several of the chief airports in the world are in the United States, including those in Chicago, Dallas–Fort Worth, Atlanta, Los Angeles, Denver, San Francisco, New York City, Miami, Boston, and Washington, D.C. Montreal and Mexico City are also major air hubs.
James Wreford Watson Wilbur Zelinsky