Canadian Branch plant economies

Modern industrial organizations in Canada are synonymous with the branch plant economy phenomenon. In general, "the term branch plant economy refers to a convenient shorthand term to describe a regional economy where a large proportion of the employees are in establishments owned by firms whose head office lies outside the region" (Watts 1). In Canada, branch plant economies are subsidiaries of companies based abroad, mostly in the U.S. A branch plant economy is a strategic …

…United States would have had a firm hold on the North American auto industry regardless if any of the above agreements were signed. These agreements helped Canada salvage some economic growth and prosperity. In the future, Canada should be extremely cautious when negotiating any free trade auto trading agreements given that the auto pact of 1965 is an excellent example of the potential disastrous effects of these agreements in an environment saturated with branch plant economies.