Arkansas Largest Trading Partner (Opinion)

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The CIA World Factbook describes Canada as “a land of vast distances and rich natural resources.”

The world’s second-largest country by area is also Arkansas’ largest trading partner, an economic statistic that deserves greater recognition.

Arkansas exports to Canada totaled $1.38 billion in 2010, up from $1.2 billion in 2008. Trade with Canada dwarfs Arkansas’ other big export markets: Mexico ($544 million), China ($336 million), Japan ($334 million) and the United Kingdom ($168 million). Canada accounts for more than one-quarter of Arkansas’ total exports, which totaled $5.2 billion (2010), according to the Foreign Trade Division of the U.S. Census Bureau.

Canada provides more oil to the U.S. than all the Persian Gulf nations combined, according to the Fraser Institute, a Canadian research organization. Canada supplied 21.2 percent of U.S. oil imports in 2009, compared with 14.4 percent from the Persian Gulf.

Second, trade with Canada underscores the importance of Arkansas’ manufacturing sector. The largest Arkansas exports are transportation-related, metals, machinery and food products.

Third, many Arkansas public companies do business in Canada. These include Wal-Mart Stores Inc., Murphy Oil Corp. and Tyson Foods Inc.

This business relationship is also documented in annual reports filed with the Securities & Exchange Commission by all four Arkansas public trucking companies.

Arkansas Best Corp. explains the firm operates a Canadian subsidiary. J.B. Hunt Transport Services Inc. notes the firm provides “delivery services to a diverse group of customers and consumers throughout the continental United States, Canada and Mexico.”

P.A.M. Transportation Services’ report explains, “We are a truckload dry van carrier transporting general commodities throughout the continental United States, as well as in certain Canadian provinces” and Mexico. USA Truck Inc. states, “We are a truckload carrier providing transportation of general commodities throughout the continental United States, into and out of Mexico and into and out of portions of Canada.”

Fourth, the U.S.-Canada relationship is a powerful reminder that peace and free trade are linked. The U.S.-Canada frontier, the CIA notes, is the longest unfortified border in the world.

The Canadians are our allies, and have been since their nation was founded in 1867. The International Peace Garden on the North Dakota-Manitoba frontier symbolizes peaceful coexistence.

But the privately owned Ambassador Bridge between Detroit and Windsor, Ontario, the busiest border crossing, underscores the sheer magnitude of bilateral U.S.-Canadian trade. One quarter of all trade crosses at the bridge.

There are also important differences. Canada uses the metric system. Travelers will see kilometers and liters, not miles and gallons.

Canada has a parliamentary government system with five political parties in Ottawa: Conservatives, Liberals, New Democrats, Bloc Quebecois and Greens. Canada is officially bilingual, with English and French sharing equal status.

Canada is a nation you are likely to encounter as our economy grows more global in scope.

Economist Greg Kaza is executive director of the Arkansas Policy Foundation, an economic think tank founded in 1995 in Little Rock. Email him at [email protected].