Group items tagged

even the government’s own report shows that Canadian imports (of both goods and services) from the EU will increase by twice as much as Canadian exports to the EU, substantially widening the existing bilateral trade deficit.

exports grew less rapidly with FTA partners than with non-FTA partners, but imports grew quicker with FTA partners than with non-FTA partners. 

In the real world, free trade agreements (not surprisingly) tend to make existing trade imbalances even worse: this is true throughout economics, where deregulation generally tends to exacerbate the imbalances and unevenness of market outcomes.

Three scenarios are presented: one in which tariffs are mutually eliminated; one in which EU-Canada trade expands in line with the historical experience of Canada’s previous FTAs; and one in which tariff elimination is combined with the appreciation of Canada’s currency (versus the euro) which has been experienced in fact since the two parties launched free trade negotiations.  In every case, the bilateral trade balance worsens significantly (and in the third scenario, it worsens dramatically – since the higher Canadian dollar reduces Canadian exports, even as imports from the EU are surging).  Based on average employment intensity across 23 goods-producing industries, the simulations suggest an incremental loss of between 28,000 jobs (in the first scenario) and 150,000 jobs (in the third).  Direct losses in Canadian GDP range between 0.56 percent in the first scenario, and almost 3 percent in the third.

A free trade agreement with the EU will exacerbate Canada’s existing large bilateral deficit, at the expense of output and employment in many important sectors of the economy. 

The surplus narrowed in February, on lower exports of crude petroleum and cars, from a revised $382-million, Statistics Canada said Tuesday. Economists polled by Bloomberg had expected a surplus of $500-million.

Both imports and exports fell. Exports tumbled 4.9 per cent after four straight months of growth while imports slid 4 per cent.

Import volumes, meanwhile, fell 4.3 per cent while prices rose 0.2 per cent. Again, most of the drop was due to lower volumes in autos and energy. Exports to the United States fell 3.5 per cent after four months in a row of growth. Imports fell 6.1 per cent, leaving the surplus at $4.6-billion. Exports to countries other than the United States fell 8.5 per cent amid lower shipments of precious metals to the European Union. Energy exports fell 8 per cent, led by a drop in crude “reflecting higher inventories in the United States,” the agency said. That follows a 71-per-cent increase in crude exports from September to January.