Canada is the 2nd largest country in the world (by area), covers six time zones, and is a veritable powerhouse in motor vehicles and energy exports. However, it is still highly dependent on US for trade. But with Trump administration trying to change the rules of global trade game, it’s time Canada looks beyond its neighbours.
TDB INTELLIGENCE UNIT | May Issue 2017 | The Dollar Business
Neighbour US is by far Canada’s largest trading partner and the two have enjoyed cordial relations for decades. However, with the Trump administration seeking a review of the North American Free Trade Agreement (NAFTA), Canada has been actively seeking new partners and has just signed a Comprehensive Economic and Trade Agreement (CETA) with European Union (EU). Canada is also in talks with China, its second largest trading partner for a free trade agreement (FTA). While India ranks 10th among its trading partners, a Canada-India FTA is also in the making.
Until the Global Financial Crisis (GFC) crippled global trade, Canada had always enjoyed a trade surplus. The North American nation reported a trade deficit for the first time in this century in CY2009. Though Canada still enjoys a huge trade surplus with US (its largest trading partner), its trade deficit has been widening since CY2015.
Motor vehicles and mineral oils are Canada’s leading exports. In CY2016 while exports of vehicles, wood, pharmaceuticals saw handsome growth, exports of mineral fuels, electrical machinery, etc., declined sharply.
Canada’s total imports witnessed a y-o-y drop of 3.86% in CY2016, as imports of some of it most imported items including mechanical appliances, electrical machinery and mineral fuels dropped sharply.
Between FY2011 & FY2016, Canda’s exports of dried leguminous vegetables to India grew by about 195%, touching a value of $1.41 billion in FY2016. Gold and diamonds too are Canada’s big exports to India.
Canada imports pharmaceuticals, diamonds, precious metals, home furnishings and garments from India in large volumes. Chemicals, marine products and iron & steel also form a significant part of its import basket.
Canada has always enjoyed a trade surplus with India. In fact, since FY2013 the surplus has been growing at a rapid clip. The two countries are also presently negotiating a free trade agreement (FTA) and a foreign investment promotion and protection agreement (FIPA) to further enhance bilateral trade.
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