The economy of North America comprises more than 579 million people (8% of the world population) in its 23 sovereign states and 15 dependent territories. It is marked by a sharp division between the predominantly English speaking countries of

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

and the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territori ...

, which are among the wealthiest and most developed nations in the world, and countries of

Central America Central America ( es, América Central or ) is a subregion of the Americas. Its boundaries are defined as bordering the United States to the north, Colombia to the south, the Caribbean Sea to the east, and the Pacific Ocean to the west. ...

and the Caribbean in the former

Latin America Latin America or * french: Amérique Latine, link=no * ht, Amerik Latin, link=no * pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...

that are less developed.

Mexico Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...

and Caribbean nations of the

Commonwealth of Nations The Commonwealth of Nations, simply referred to as the Commonwealth, is a political association of 56 member states, the vast majority of which are former territories of the British Empire. The chief institutions of the organisation are the ...

are between the economic extremes of the development of North America.

lies in between these two extremes as a

newly industrialized country The category of newly industrialized country (NIC), newly industrialized economy (NIE) or middle income country is a socioeconomic classification applied to several countries around the world by political scientists and economists. They represe ...

(NIC), and is a part of the North American Free Trade Agreement (NAFTA) and a member of the Organisation for Economic Co-operation and Development (OECD), being one of the only two Latin American members of this organisation (together with Chile). The United States is by far the largest economy in North America and the largest national economy in the world. The US, Canada and Mexico have significant and multifaceted economic systems."United States, Economy.U.S. Central Intelligence Agence
Accessed January 2021. In 2011, the US has an estimated per capita gross domestic product (PPP) of $47,200, and is the most technologically developed economy in North America. The United States' services sector comprises 80% of the country's GDP (estimated in 2017), industry comprises 19.1% and agriculture comprises 0.9%. Canada's economic trends are similar to that of the United States, with significant growth in the sectors of services, mining and manufacturing."Canada, Economy.U.S. Central Intelligence Agence
Accessed June 2011. Canada's GDP (PPP) was estimated at $39,400 in 2010. Canada's services sector comprises 70.2% of the country's GDP (estimated in 2017), industry comprises 28.2% and agriculture comprises 1.6%. Mexico has a GDP (PPP) of $15,312, and per capita income is estimated at one-third of the United States'. "Mexico, Economy.U.S. Central Intelligence Agence
Accessed June 2011. The country has both modern and outdated industrial and agricultural facilities and operations, and is modernizing in sectors such as energy production, telecommunications and airports.

Economic development

Great Depression

The Great Depression began in North America in October 1929. The start is often dated to the stock market collapse of

Black Tuesday The Wall Street Crash of 1929, also known as the Great Crash, was a major American stock market crash that occurred in the autumn of 1929. It started in September and ended late in October, when share prices on the New York Stock Exchange coll ...

although this was not the cause of the Great Depression. Canada and the United States experienced especially large declines, with the gross domestic product falling 37% from 1929 to 1933 in the United States, and 43% in Canada over the same period. The economy reached its lowest point in 1933, however recovery was slow. The outbreak of

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposing ...

in 1939 created demand for war materials that brought about the end of the depression. The Great Depression spurred increased government intervention in the economy in North America. The United States introduced unemployment insurance, a minimum wage and standardised working hours under the New Deal. Canada introduced similar measures. Mexico nationalised some key industries during the Great Depression, with the railroads nationalised by 1937 and the oil industry nationalised in 1938.

World War II

Due to the large scale enlistment of men into armed forces during

, women entered the workforce en masse, filling many jobs in manufacturing and technical areas that had previously been closed to women. This led to the "We can do it!" campaign. The economic output in North America increased substantially, with unemployment practically eliminated in the United States. Rationing severely reduced the availability of consumer goods, with the increase in industrial production coming from the demand for war materials. During the peak of World War II activity, nearly 40 per cent of US GDP was devoted to war production.

Cold War

After the 2nd world war, the United States and Russia emerged as the world superpowers with both economies being strong and thus each country wanted to be recognised as a superpower.The relationship between the two countries further deteriorated with the space race.

US-Canada Free Trade Agreement and NAFTA - a new era of economic integration

The Canada-United States Free Trade Agreement of 1989 and the subsequent expansion to the North American Free Trade Agreement (NAFTA) triggered a dramatic increase in trade between these three countries, with Mexican trade with the United States and Canada increasing threefold. Over 85% of Canadian exports in 2006 went to the United States.

Regional variation

With various climate zones, agricultural products vary from country to country. Job sectors are also different, with industrialized countries having more service workers, and developing countries relying on agriculture.

Trade blocs

Asia-Pacific Economic Cooperation

The

Asia-Pacific Economic Cooperation The Asia-Pacific Economic Cooperation (APEC ) is an inter-governmental forum for 21 member economies in the Pacific Rim that promotes free trade throughout the Asia-Pacific region.

(APEC) is a group of Pacific Rim countries which meet with the purpose of improving economic and political ties. APEC's stated goals are aimed at free and open trade and investments by cutting tariffs between zero and five percent in the Asia-Pacific area for industrialised economies by 2010 and for developing economies by 2020. The organisation has members from four continents, those from North America are

and the

Caribbean Community

The

Caribbean Community The Caribbean Community (CARICOM or CC) is an intergovernmental organization that is a political and economic union of 15 member states (14 nation-states and one dependency) throughout the Caribbean. They have primary objectives to promote econo ...

(CARICOM) was created ''"To provide dynamic leadership and service, in partnership with Community institutions and Groups, toward the attainment of a viable, internationally competitive and sustainable Community, with improved quality of life for all"''. Its secretariat is based in Georgetown, Guyana, South America. - On January 1, 2006, six members: (

Barbados Barbados is an island country in the Lesser Antilles of the West Indies, in the Caribbean region of the Americas, and the most easterly of the Caribbean Islands. It occupies an area of and has a population of about 287,000 (2019 estimate) ...

Belize Belize (; bzj, Bileez) is a Caribbean and Central American country on the northeastern coast of Central America. It is bordered by Mexico to the north, the Caribbean Sea to the east, and Guatemala to the west and south. It also shares a wate ...

, Guyana,

Jamaica Jamaica (; ) is an island country situated in the Caribbean Sea. Spanning in area, it is the third-largest island of the Greater Antilles and the Caribbean (after Cuba and Hispaniola). Jamaica lies about south of Cuba, and west of His ...

, Suriname and

Trinidad and Tobago Trinidad and Tobago (, ), officially the Republic of Trinidad and Tobago, is the southernmost island country in the Caribbean. Consisting of the main islands Trinidad and Tobago, and numerous much smaller islands, it is situated south of ...

) unofficially ushered in the Caribbean (CARICOM) Single Market and Economy (CSME). - At the official signing of the protocol on January 30, 2006, in Jamaica, A further six members: ( Antigua and Barbuda, Dominica, Grenada,

Saint Kitts and Nevis Saint Kitts and Nevis (), officially the Federation of Saint Christopher and Nevis, is an island country and microstate consisting of the two islands of Saint Kitts and Nevis, both located in the West Indies, in the Leeward Islands chain ...

, Saint Lucia and

Saint Vincent and the Grenadines Saint Vincent and the Grenadines () is an island country in the Caribbean. It is located in the southeast Windward Islands of the Lesser Antilles, which lie in the West Indies at the southern end of the eastern border of the Caribbean Sea w ...

) announced their intention to join by the second quarter of 2006. Montserrat, a British Oversees territory is awaiting approval by the

United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...

. Haiti and

the Bahamas The Bahamas (), officially the Commonwealth of The Bahamas, is an island country within the Lucayan Archipelago of the West Indies in the North Atlantic. It takes up 97% of the Lucayan Archipelago's land area and is home to 88% of the ar ...

have no immediate plans to join.

Central American Free Trade Agreement

The

Central American Free Trade Agreement Central is an adjective usually referring to being in the center of some place or (mathematical) object. Central may also refer to: Directions and generalised locations * Central Africa, a region in the centre of Africa continent, also known as ...

(CAFTA) is an agreement between the

and the Central American countries of Costa Rica, Guatemala, El Salvador, Honduras, and

Nicaragua Nicaragua (; ), officially the Republic of Nicaragua (), is the largest country in Central America, bordered by Honduras to the north, the Caribbean to the east, Costa Rica to the south, and the Pacific Ocean to the west. Managua is the countr ...

. The treaty is aimed at promoting

free trade Free trade is a trade policy that does not restrict imports or exports. It can also be understood as the free market idea applied to international trade. In government, free trade is predominantly advocated by political parties that hold econ ...

between its members.

and

are negotiating membership.

North American Free Trade Agreement

The North American Free Trade Agreement (NAFTA) is an agreement between Canada, Mexico and the United States to eliminate tariffs on goods traded between themselves. Although currently only a trade agreement, with no supranational bodies or laws as in the

European Union The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...

, there have been various proposals to move towards a

customs union A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up ...

or a North American currency union. It is unknown whether this may eventually develop into a

North American Union The North American Union (NAU) is a theoretical economic and political continental union of Canada, Mexico and the United States, the three largest and most populous countries in North America. The concept is loosely based on the European Union, o ...

similar to that of

Europe Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...

Currency

Below is a list of the currencies of North America, with exchange rates between each currency and both the ''euro'' and ''US dollars'' ^{as of 20 July 2022}. This list may vary as it is not current. ''Table correct as of 20 July 2022''

Economic sectors

Agriculture

Agriculture Agriculture or farming is the practice of cultivating plants and livestock. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people t ...

is very important in Central American and Caribbean nations. In western Canada, in the provinces of Saskatchewan, Alberta, British Columbia and Manitoba, wheat and other various main agricultural products are grown. The U.S. also has many states with significant agriculture production, mainly in the central continental U.S. Mexico produces many tropical fruits and vegetables as well as edible animals.

Manufacturing

North America has developed and its

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to ...

sector has grown. In the beginning the European nations were the large manufacturing powers. At the start of the 1950s, the United States was a top manufacturing power, with Canada and Mexico also making significant progress.

Service

In Canada, the US and the Caribbean, service-based employment is a significant percentage of overall employment. Many people work in stores and other retail locations. In Canada more than 70% work in the services sector, with a similar percentage in the United States.

Investment and banking

The United States leads North America in investment and

bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...

ing. Canada, Mexico and most recently, February 2011, El Salvador is growing in this sector. And smaller economic powers such as Guatemala, Honduras, Costa Rica, and Panama are also growing slowly in this sector.

Tourism

Tourism Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours. The World Tourism Organization defines tourism mor ...

is extremely important for the Caribbean economies, as they contain many beaches and have warm climates. Skiing in Canada and the US is also important. Tourism of

national parks A national park is a natural park in use for conservation purposes, created and protected by national governments. Often it is a reserve of natural, semi-natural, or developed land that a sovereign state declares or owns. Although individua ...

and natural landmarks, such as

Mount Rushmore Mount Rushmore National Memorial is a national memorial centered on a colossal sculpture carved into the granite face of Mount Rushmore (Lakota: ''Tȟuŋkášila Šákpe'', or Six Grandfathers) in the Black Hills near Keystone, South Dakot ...

and the Grand Canyon in the United States, and

Niagara Falls Niagara Falls () is a group of three waterfalls at the southern end of Niagara Gorge, spanning the border between the province of Ontario in Canada and the state of New York in the United States. The largest of the three is Horseshoe Fall ...

and

Moraine lake Moraine Lake is a glacially fed lake in Banff National Park, outside the hamlet of Lake Louise, Alberta, Canada. It is situated in the Valley of the Ten Peaks, at an elevation of approximately . The lake has a surface area of . The lake, bein ...

in Canada, contribute to the economy in these regions.

References

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