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PPI | Trade Fact of the Week | January 10, 2007
Canada is America's Top Trading Partner


Editor's Notes: The PPI "Trade Fact of the Week" is a weekly email newsletter published by PPI's Trade & Global Markets Project. To sign up for a free subscription, click here. (Just make sure to check the box next to "Trade & Global Markets.")

Original links are included though some may have expired.


The Numbers:

U.S. merchandise imports 2006*, from:

World: $1880 billion
Canada: $310 billion
All other FTAs: $279 billion
Mexico: $201 billion
Israel: $19 billion
CAFTA: $19 billion
Singapore: $18 billion
Chile: $10 billion
Australia: $8 billion
Jordan, Oman & Bahrain: $4 billion

* Estimated, based on data available from January to November 2006.

What They Mean:

"Worthwhile Canadian Initiative," the Flora Lewis op/ed piece in the April 10, 1986 edition of The New York Times, remains famous for the most boring headline in the 300-year history of journalism. The actual "initiative" was the suggestion by the Canadian Conservative government led by Brian Mulroney of the U.S.-Canada Free Trade Agreement. In contrast to many worthwhile ideas, the agreement went into effect fairly quickly: negotiated between 1987 and 1988, passed in 1989.

Since then, northern-border trade has risen about four-fold. In 1988, U.S.-Canada goods trade totaled $152 billion and services trade was $22 billion. By 2006, the figures had grown to $550 billion and $60 billion. Ninety million gallons of Canadian-brewed beer, two million Canadian-built cars and 830 million barrels of crude oil and refined petroleum products -- more than Americans buy from the Persian Gulf -- travel south each year; as they do, they cross paths with $5 billion worth of northward-bound California semiconductor chips, $2 billion in Alabama manufactured goods, $6.4 billion in Michigan auto parts crossing the Ambassador Bridge from Detroit to Windsor, and nearly half the total exports of Montana and North Dakota. Three ways to put it in perspective:

    (1) The $610 billion in U.S.-Canada goods and services trade exceeds America's trade with all of its 15 other FTA partners put together. A year's worth of imports from the United States' six CAFTA partners, for example, is the equivalent of a bare three weeks' worth of Canadian imports.

    (2) U.S.-Canada trade is only $150 billion behind American goods and services trade with all 27 EU members combined -- excluding services, U.S.-Canada trade is actually slightly larger than U.S.-EU trade -- and far above the $360 billion in U.S.-China trade.

    (3) U.S.-Canada trade is almost a 20th of all the trade in the world.

In total, Canada accounts for one-sixth of all U.S. goods imports and over a fifth of exports. The figures for Canada are much larger: Lewis's article suggested that in 1986, the United States took 75 percent of Canadian exports, and that exports generally made up 30 percent of Canadian GDP. The figures are now, according to Ambassador Michael Wilson, 80 percent and 38 percent.

Further Reading:

Canadian Ambassador Michael Wilson on U.S.-Canada trade, Chinese competition, the 2006 elections, terrorism, border security and their implications for U.S.-Canada relations, at the Calgary Chamber of Commerce. Also mentions acquaintance with Mick Jagger:
http://geo.international.gc.ca/can-am/washington/
ambassador/061128-en.asp

Canadian economics blogger Stephen Gordon's "Worthwhile Canadian Initiative," defiantly in English from "Quebec City," covers Canadian trade and economics. Features half-hearted defense of America's Democrats on trade, Chinese competition for Canadian mills in the U.S. newsprint market, The Economist magazine's habitual ignoring of Canada, the mistakes of the Canadian Wheat Board:
http://worthwhile.typepad.com/worthwhile_canadian_initi/

Flora Lewis from 1986 on the actual initiative:
http://select.nytimes.com/gst/abstract.html
?res=F5071EFC355C0C738DDDAD0894DE484D81

The Ambassador Bridge serves 10,000 trucks a day, and is thought to be the world's business commercial border point. Today's traffic report:
http://www.ambassadorbridge.com/bridge-report.php

Is Canada too high-minded? An article from The Vancouver Sun suggests that the nation's safe, sensible reputation is depressing the lucrative international-student business. ("We have been perceived as bland,'' said Jennifer Humphries, vice-president, membership and scholarships, at the Ottawa-based Canadian Bureau of International Education.")
http://www.canada.com/vancouversun/news/
story.html?id=3df907ea-4f2b-
4d72-9d00-3e2617fccb53&k=74879

The Canadian Broadcasting Corporation's viewer poll, ranking history's 100 Greatest Canadians, is unlikely to help. Patriotic attempts to place Pamela Anderson, "Hockey Night in Canada" emcee Don Cherry, Avril Lavigne, and William Shatner at the top all fell short. Instead voters chose Thomas Douglas, the premier of Saskatchewan between 1944 and 1961 and crusader for universal health care, as the greatest Canadian ever. CBC's Greatest Canadians list:
http://www.cbc.ca/greatest/





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