Mr. Chair and committee members, thank you for the invitation to take part in your meeting on buy American and the economic relationship between Canada and the United States.
The Business Council of Canada is composed of 150 chief executives and entrepreneurs of Canada's leading enterprises. Our member companies directly and indirectly support more than six million jobs across the country and hundreds of thousands of small businesses. Representing different industries and regions, these men and women are united in their commitment to improve the quality of life for all Canadians.
We know that Canada is a trading nation. Our prosperity and living standards rely upon it. Sixty-five per cent of our GDP is tied directly to trade. The bulk of this trade is with the United States. As of 2020 it accounted for 73% of Canada's merchandise exports and 53% of our services exports. Two million Canadian jobs are related to exports with the United States.
This relationship is mutually beneficial. Nearly nine million jobs in the United States depend on cross-border trade and investment with Canada, and we're the largest or among the largest export partners for most states.
Given the importance of this relationship for our shared prosperity, during CUSMA negotiations the business community on both sides of the border advocated for a “do no harm” approach and for modernizing certain elements of the 25-year-old NAFTA, the basis for most of our bilateral trade.
The council and many of our American counterparts were pleased with the new agreement, both in its substance and because it was able to bring a wider range of stakeholders on board. The level of bipartisan and key stakeholder support for this agreement in the U.S. right now is remarkable, especially given the current political circumstances south of the border.
While CUSMA's government procurement chapter does not apply to Canada-U.S. trade, the overarching goal of the agreement was to enhance North American competitiveness in manufacturing, among other areas, while supporting well-paying jobs. We believe the direction taken on buy American by the new administration, which happens to broadly support CUSMA and its objectives, undermines the success of this critical agreement.
Bilateral challenges related to buy American are certainly not new. However, the timing and approach of the latest proposed actions in the executive order and in the American jobs plan go against the spirit of CUSMA as well as many of the shared objectives for bilateral co-operation, including that in the road map for a renewed U.S.-Canada partnership and priorities outlined in the U.S.-Canada high-level ministerial dialogue on climate ambition.
It's critical that Canada secure an exemption or a clear carve-out. Tighter application of buy American rules and restrictions related to the American jobs plan will not only harm Canadian but also American workers.
CUSMA created a strong, resilient and competitive regional supply chain. Proposed changes could harm trade and investment in Canada and fragment American supply chains at a time when we need to work together to address economic resiliency and environmental challenges. Canada faced a formidable challenge at the outset of CUSMA negotiations, but with a proactive and coordinated team Canada approach that involved the business community and labour, among others, we were able to overcome and emerge with an outcome that benefited people on both sides of the border.
If we're to be successful this time around, we need to take a similar approach and to do so with urgency. This effort should be directed at the White House, Congress and state and municipal officials. Most importantly, it should be in alignment with U.S. stakeholders in business and labour.
Canada should not challenge buy American as a concept. We'll lose that argument. Rather, we need to make the case that working with Canada, given the unique integrated nature of our economies, is key to achieving the procurement policies goal of ensuring strong and resilient supply chains as well as well-paying jobs. The Business Council of Canada and its members stand ready to support a team Canada approach.
I thank you for this opportunity and look forward to answering your questions.