China outsells Canada in US
China has firmly eclipsed Canada as the No. 1 seller of goods to the US, a shift in trade that reflects the Asian consumer goods juggernaut's ever deeper penetration of the US market. It also signals that Canada's much-vaunted special trading relationship with Washington is growing a little less so, a development that experts say should hasten Ottawa's efforts to open up new markets. Canadian Chamber of Commerce president Perrin Beatty said Ottawa must also redouble effort on its relationship with Washington in order to keep borders open and dodge restrictions to bilateral trade. “You pay the greatest attention to people you do the most business with - and the extent to which we get eased out as a supplier to the United States by the Chinese, it has an impact on our relative standing” in Washington, Beatty said. China's shipments by value to the US have previously surpassed Canada on a monthly basis, but this summer marks the first time it did so over a 12-month period. China sold US$312.2-billion worth of merchandise to the US between Aug. 1, 2006, and July 31, 2007, while Canada shipped $305.6B, trade statistics show. “This really pounds home the point of just what kind of weight China now carries in the global economy,” said Douglas Porter, deputy chief economist of BMO Nesbitt Burns. “It's safe to say we have had a shift in positions now … I think China's position as the number one provider to the US economy is basically locked in now.” He said he doesn't believe controversy over tainted Chinese product will undercut China's new lead.
Canada and the US are still each other's biggest trading partner - and are expected to remain so for many years - because this country imports about four times as much in goods from the US as China does. The US shipped $237.5B to Canada over the same 12-month period from August 2006, to July 2007, while it only sold $59.7B to China. Trade lawyer Riyaz Dattu said Canada's second-place finish to China in merchandise goods shipments to the US doesn't tell the whole story because this country's lucrative service sectors - from financial services to engineering to telecom - is where Canadian export strength has been growing. “[This] does show that the Canadian manufacturing sector is not as competitive now - and hasn't been competitive for the last little while - but it means that Canadian businesses need to focus where we can make the biggest dent,” said Dattu with Osler Hoskin & Harcourt. There's a silver lining to this trade shift: Canada has become less dependant on the US market, with sales to the US dropping over the past seven years. As a share of Canadian exports, sales to the US have declined to 75% from an all-time high of around 85% back in 2000. “That's actually helped Canada's economy stay on the rails … in the last year even as the US economy has slowed markedly,” Porter said.
(Globe and Mail 070914)
All the more reason for Canadian industry to start pulling up stakes and more earnestly look for markets elsewhere before the American ship starts sinking and pulling us down with it. We're still far too dependent on the U.S. market for our general prosperity. Time to look at the emerging markets which will be the powerhouses of the future once the exhausted and overextended American market starts to tank. I personally think we're far too late to not be sucked down as well (we really should've been doing this 10-15 years ago), but later is better than never.