Economics

The North America market is one of the richest in the world. Measured in terms of GDP, it is the equivalent of Western Europe. But with a somewhat smaller population, GDP per capita in North America, Canada, Mexico and the U.S., is around 12 percent higher than in Western Europe. The North American Free Trade Agreement (NAFTA), which came into effect January 1, 1994, sets out the schedule for tariff elimination for members.. As a small country, Canada has always been careful in it's dealings it's large neighbor, the U.S., however,

compliance to

this agreement threatens our very existence. Canada was unfairly taken

advantage

of in the singing of this agreement, our identity of a sovereign nation

is at

risk.

The North American market is also one of the most sophisticated and

demanding.

It is an excellent base from which to develop and launch new products.

From a

Canadian base, companies can establish a solid market position

throughout North

America and then reach out to serve global markets. This agreement,

which and

contains many key provisions to facilitate the conduct of business among

the

three countries, has been a benefit to Canada-U.S.-Mexico trade. The

continent-

wide transportation system that binds this market together is efficient

and

cost-effective. Carriers of all modes are investing in more

sophisticated technology and entering into strategic alliances to improve

service. Border

crossings are becoming easier.

Canada provides an ideal location for serving the entire North American

market.

Companies based in Canada have preferred access to a market of 380

million

people, with a combined Gross Domestic Product (GDP) of more than $10

trillion

(Canadian dollars). However, our participation in the agreement allows

the U.S.

unobstructed to our market. This poses a serious problem when looking

at pure

numbers. Canada is a country of approximately 28,000,000 people and the

U.S. a

country of about 280,000,000. The extra "0" means the U.S. in ten times

greater

then Canada in population size. The implications of this are enormous.

Because of the difference in size it is logical to assume that the

average

Canadian firm is about ten times smaller then its U.S. counterpart. As

an

example, Bell Canada (Canada's major telecommunications company) is

worth an

estimated 9 billion dollars. AT&T (U.S. major telecommunications

company) is

worth approximately 108 billion. These numbers should speak for them

selves.

Although it hasn't happened yet, AT&T could attempt a competition war on

Bell

Canada

There are many ways to view North American markets. Initially, they can

be

viewed as three national markets, with certain differentiating