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Canada United States and Mexico’s economy and politics

Paulina Herrera Martínez

Acsenda School of Management

BIBM101

Maloud Shakona

April 22, 2023

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Canada, United States and Mexico’s economy and politics

United States of America

The United States economy is a highly developed liberal-capitalist market economy.
Nominally, it is the world's largest, and the second-largest economy in terms of purchasing
power parity, accounting for 22% of the world GDP. USA trade to GDP ratio for 2021 was
25.48%, a 2.1% increase from 2020. For most of its history, the United States has faced very few
barriers to trade or job growth, and the USA government has taken active steps to protect USA
trade around the world for the past 200 years. In addition, the USA has a lot of natural resources.
Resources such as coal, petroleum, copper, timber, gold and silver contributed greatly to
manufacturing and therefore to the development of the country's economy. Apart from this, they
have high production power in many fields such as technology, military, agriculture. Although
the United States economy occupies a very important place in the world, it has some problems
within itself. One of them is high tax rates. In addition, since the USA is not a social state but a
capitalist state, there is income inequality between individuals. The United States has a massive
land border with Canada. They have close relations, commercial and political partnerships with
each other due to the fact that they are two neighbour countries and the deep historical
partnership they share. These two countries shared one of the world's largest trade relations with
approximately $1.3 trillion in goods and services trade last year. That year Canada was the
United States' largest trading partner in goods and services. Therefore, Canada and the United
States have enormous bilateral relations that are inseparable from each other. In addition, the
USA has commercial relations with most countries in the world. At the beginning of these are
the EU countries, UK China, and Mexico, other than Canada. The USA has a strong
understanding of the state and has played a major role in the development of the country's
economy with the policies it has followed until today. With the colonialism policy it has
observed, the government has had many raw material resources abroad and in overseas countries,
enabling the country to reach its present wealth. The government has supported private
companies in the country and many benefits have been provided to these companies. Today,
America has many massive companies in the world in every field, which cover a large part of the
US economy.

Mexico
Mexico is a country located in North America and has a mixed economy with both strengths and
weaknesses. Some of its strengths include its large labor force, abundance of natural resources,
and a diversified export market. However, the country also faces weaknesses such as income
inequality, corruption, and dependence on the United States economy. Mexico has a significant
relationship with its neighbor countries, especially with the United States and Canada. The North
American Free Trade Agreement (NAFTA) has been a vital factor in Mexico's economic
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relationship with these countries. The agreement allows for the free movement of goods,
services, and people across the borders, which has boosted the Mexican economy. Besides,
Mexico is also an active member of the World Trade Organization (WTO), which has allowed
the country to engage in global trade with other countries. Mexico has a gross domestic product
(GDP) of $1.27 trillion, making it the second-largest economy in Latin America. The country's
GDP has grown gradually over the past few years, mainly due to its export-oriented economy,
which has helped the country to become more competitive in the global market. Mexico is a
significant exporter of various goods, such as vehicles, electrical machinery, and medical
instruments. Its primary export partners are the United States, Canada, and China. In terms of
imports, Mexico primarily imports electrical machinery, vehicle parts, and petroleum. Its
primary import partners are the United States, China, and Japan. Exports account for around 35%
of Mexico's GDP, which highlights the importance of international trade to the country's
economy. Mexico's export market is diversified, which has helped the country to reduce its
dependence on a single market. Mexico's economy depends heavily on the manufacturing sector,
which accounts for around 17% of the country's GDP. The country is known for its
manufacturing of automobiles, electronic goods, and aerospace parts. Besides, the service sector
also plays a significant role in the country's economy, accounting for around 60% of the GDP.
Mexico is a federal republic with a presidential system of government. The President is both the
head of state and the head of government. The political regime has a significant influence on the
country's economy. For instance, political instability can lead to a decrease in foreign investment
and hinder economic growth. Additionally, corruption has been a long-standing issue in Mexico,
which has affected the country's economic development negatively.
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Reference

The World Bank, IBRD.IDA

https://www.worldbank.org/en/country/mexico/overview