Canada diversifying trade; China now 3rd largest partner

OTTAWA — Canada continues to mix up its international portfolio in merchandise trade, as exports to countries other than the United States advanced in 2007, largely on the strength of growing trade with the United Kingdom, Norway and China.

A new Stats Canada analysis of international trade patterns shows that exports to non U.S.-countries has grown considerably over the past five years, up 17.4 percent in 2007 alone. As a result, these countries as a group represented more than one-fifth of Canada’s export market in 2007.

Exports to China were responsible for nearly one-fifth of the total growth in Canada’s exports. This most recent surge elevated China to the position of Canada’s third largest export market, replacing Japan. Wood pulp, metals, and organic chemicals were among the leading exports to China.

Companies in Canada dramatically increased shipments to Europe as well, bringing exports to $41.7 billion. These increases — based on the strength of nickel and inorganic chemicals — were primarily due to large gains in exports to UK, Norway and the Netherlands.

Canada Has Options: Both exports and imports from
countries other than the US have been on the rise.

The U.S., of course, remains the largest export destination, but the low value of the U.S. greenback, housing crunch, plus a deepening economic downturn has caused the U.S. market to lose some ground on other destinations.

Imports from countries other than the US have also been on the rise. They represented over 45 percent of Canada’s total imports last year, the result of growth in shipments from China and Mexico. High-tech products such as computers and telecommunication and related equipment dominated imports from China, while Mexico was powered by increasing levels of telecommunications equipment and motor vehicle parts.

Forestry, Auto Still Declining:

The 2.1 percent increase in total merchandise exports reflected increases in both volumes (+1.1%) and prices (+1.0%). Most sectors contributed to the increase, with industrial goods and energy leading the way.

Although the U.S. was still the biggest consumer of Canada’s energy products, new demand for crude oil from China and Singapore boosted Canada’s energy exports to Asia.

Forestry and automotive products were the only sectors that recorded declines, with the largest drop in value being automotive products.
Forestry exports have been on the decline for the past few years, particularly lumber and sawmill products.