Canada’s trading partners and products aren’t what they used to be. A new report by the Conference Board of Canada’s Global Commerce Centre suggests our strong dollar, the growing role of emerging markets and shrinking trade barriers have dramatically altered the trade landscape in Canada.
While the value of our trade with the U.S. is essentially the same today as it was in 2001, the importance of the U.S. as a trading partner has lessened considerably. In 2001, the U.S. accounted for 87% of Canadian merchandise exports, but by 2011 that figure had dropped to 74%, while trade with the rest of the world grew by 80%. The report notes that among Canada’s 10 largest export markets, there have been particularly significant increases in the U.K. and China.
When it comes to imports, our changing relationship with the U.S. is especially apparent. In 2011, only half of Canada’s merchandise imports came from the U.S., compared with 64% in 2001. Japan and the U.K. have also seen their share of Canadian imports decline, largely due to Canada’s trade with China. Over the past decade the value of Chinese imports into Canada has more than tripled, making China our second-largest source of imports, 11% of the total.
What we’re trading is changing, too. In 2001, for example, transportation equipment, paper products, computer and electronic products, plastic and rubber products and wood products accounted for nearly half of the Canadian merchandise exports, by value, to the rest of the world. A decade later, the combined share of those products sits at only 26%. Meanwhile, oil and gas, mining, chemicals, manufactured primary metals, petroleum products, and food products have increased to account for 53% of total Canadian merchandise exports in 2011 (up from 29% in 2001).
The report points out that trade barriers around the world have been lessening as well, adding to changes in Canadian trade patterns. Canada is now a partner in 10 free-trade agreements globally and may soon be part of nearly 20 more.
Finally, the strength of the Canadian dollar relative to the U.S. dollar has impacted the shift in our countries’ trade relationship. However, the report points out, the dollar’s strength isn’t the only factor, since the Canadian dollar has also risen in value versus a variety of other currencies such as the euro, the British pound, the Chinese yuan and the Mexican peso.