From Pax Britannica to Pax Americana and Beyond

Canada's increasingly diversified trade and investment pattern may eventually give the country more maneuverability in its foreign economic policy than it ever enjoyed during the eras of Pax Britannica and Pax Americana. From the conquest of New France until 1914, Canada's economy was firmly within the imperial orbit, dependent upon Britain as a source of capital and as the largest buyer of its exports. The interwar years saw Britain vying with the United States to be Canada's largest trading and investment partner. Although Canadian and imperial preferences attempted to give Britain the edge, the Canadian government shifted policy by entering trade agreements with the United States in 1935 and 1938. By 1939, Canada was clearly within Pax Americana, with the United States now the predominant foreign influence in the Canadian economy. Since the 1960s, however, new factors have emerged to moderate American economic influence in Canada, including the decline of the traditional branch plant; the rapid growth of Canadian exports abroad, including the sale of manufactured goods to the American market; and the rise of Canadian multinational enterprises with extensive influence in the United States.