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Mike Seo

Sharp export drop squeezes trade surplus - The Globe and Mail - 1 views

  • Exports tumbled 4.9 per cent in February, outpacing a 4-per-cent drop in imports and slicing the country’s trade surplus to just $33-million, trade figures showed Tuesday.
  • Canadian export levels remain 19 per cent below their peak of July, 2008.
  • The sharp drop in February’s trade volumes “portends a slowdown in the Canadian economy in the second quarter of 2011 – a slowdown connected with less robust growth in the U.S., as well as major disruptions to North American vehicle output as a result of critical parts shortages from Japan,” said Brian Bethune, chief economist for Canada at IHS Global Insight.
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  • 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.
Chris Li

Will export restrictions on energy echo those on food? - The Globe and Mail - 2 views

  • Instead of soaring food and energy prices encouraging food and energy producers to export more, they may export less and divert more of their output to domestic markets. The reason is simple: to keep domestic prices from matching soaring world prices.
  • But when it is food and energy prices, the political pressures become immense. They are so immense you can toss your economics textbook out the window.
  • Instead, no less than 29 food-exporting countries responded by banning food exports and kept their crop production for a hungry domestic market.
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  • And food-importing countries that secured supplies, quickly started to hoard them in anticipation that more food exporters would decide to keep their crops at home.
  • “to maintain social stability and promote economic development”.
Kevin Yeo

U.S. will be Canada's top export market in 2040 - The Globe and Mail - 0 views

  • Canada has spent years -- and a considerable amount of money -- trying to convince exporters to look beyond the mighty U.S. market and seek customers in fast-growing emerging economies, such as China, India and Brazil.
  • And to some extent, it’s worked. The United States accounted for 75 per cent of total exports last year, down from 85 per cent in the mid-1990s.
  • But a new forecast of long-term export trends by the Department of Foreign Affairs and International Trade suggests the United States will still be our dominant merchandise export destination in 2040, grabbing virtually an identical share as today, at 75.5 per cent.
Chris Li

U.S. will be Canada's top export market in 2040 - The Globe and Mail - 1 views

  • ed. The United States accounted for 75 per cent of total exports last year, down from 85
  • The United States accounted for 75 per cent of total exports last year, down from 85 per cent in the mid-1990s.
  • United States will still be our dominant merchandise export destination in 2040
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  • “Despite the rapid growth in emerging economies, the United States remains a large and wealthy market that is right next door to Canada, whereas emerging markets are a significant distance away,”
  • the U.S. is also Canada’s leading source of foreign direct investment, or FDI. In 2010, the stock of U.S. investment here was $306-billion.
Mike Seo

Canada exporters face headwinds, new minister says | Reuters - 1 views

  • the strong currency and growing competition from emerging economies could stall the country's export growth.
  • Canada's trade-reliant economy has fully recovered from the recession but growth has been restrained by the exchange rate with the U.S. dollar, which erodes exporter competitiveness.
  • The central bank chief and finance minister have been hounding businesses to find ways to compete with the new normal of a currency on par with the U.S. dollar. These include investing in new technologies and taking other steps to outperform global competitors.
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  • Perrin Beatty, chief executive of the Canadian Chamber of Commerce and a former Conservative cabinet minister, warned Canada's dismal productivity rate, which he said is about 25 percent below that of the United States, was the biggest problem facing exporters.
Chris Li

The Progressive Economics Forum » Out of Equilibrium: Why EU-Canada Free Trad... - 2 views

  • comprehensively liberalize trade in goods and services, government procurement, foreign investment, and other important economic interactions between the two parties.
  • The recent appreciation of the loonie against the euro (up 18% since the two sides first committed to free trade talks) vastly overwhelms any cost advantage Canadian exports could hope to attain in European markets through tariff elimination.  Aggregate trade imbalances, and the skewed sectoral composition of trade, imply that Canada already loses some 70,000 jobs
  • The EU and Ottawa commissioned a joint economic study which predicted mutual economic gains from a free trade agreement, worth approximately $12 billion per year to Canada by 2014.  However, that report incorporates bizarre and far-fetched assumptions regarding the self-adjusting nature of all markets, and the manner in which free trade would be implemented and experienced. 
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  • 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. 
Kevin Yeo

AmericanEconomicAlert.org Blog Network - 0 views

  • The rise in the oil deficit did indeed greatly outpace the rise in the overall deficit for March – 22.78 percent versus 6.03 percent.  But the increase in the deficit for high-tech products also surged – by 17.00 percent.  And the manufacturing deficit grew by 6.24 percent.
  • In March alone, U.S. exports of high tech products jumped by 20.26 percent (from $21.01 billion to $25.27 billion), while manufactures exports overall rose even faster – by 21.57 percent (from $71.56 billion to $86.99 billion).  
  • But deficits in these sectors kept increasing because their much larger import levels rose robustly, too.  Meanwhile, for the first quarter of this year, the overall trade deficit is running  23.46 percent ahead of last year’s comparable total – which in turn was up 25.91 percent from the first quarter 2009 number.
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  • Bottom line: Despite genuinely booming imports, trade flows still kept dragging down America’s growth and employment performance, and still kept boosting the country’s debt burden.  Do these trends really deserve the label “recovery”?
Mike Seo

Canada firms may miss Chinese market - 1 views

  • If Canada's energy firms don't start exporting to China now, others might beat them to it, according to an Enbridge Inc. vice-president.
  • They argued the window of opportunity to sell to China won't always be open largely due to competition and the chance the world's second largest economy may cease growing at its current staggering pace - reducing the money its investors can spend.
  • Colombian oil producer Ecopetrol plans to shift the majority of its oil exports from the United States to Asia in a decade due to higher sales profitability on the latter continent.Enbridge is on a similar quest.The company is seeking regulatory approval for its $5.5-billion Northern Gateway pipeline project to connect Canadian oilsands and natural gas fields to the West Coast, where liquefied natural gas could be shipped to Asia.
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  • As some 300 million to 400 million people annually move from rural to urban China, the country becomes richer and people consume more, Abbott said, noting power consumption in 2010 of 3,248 terawatt hours should grow to 4,510 terawatt hours in 2015.
Mike Seo

Canadian pork export market threatened - Community News Blog - 3 views

  • The president of Canada Pork International warns the lack of a Canada-South Korea free trade agreement threatens to cost Canada a pork export market worth over 100 million dollars a year.
  • Representatives of the Canadian pork industry have asked Prime Minister Stephen Harper to become directly involved in getting free trade discussions back on track.
  • Canada pork International president Jacques Pomerleau says Canada’s trading partners in South Korea have warned, without a free trade agreement, Canada will be out of that market within two years.
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  • We have to remember that Korea is a very price sensitive market and the fact that there’s no plan for Canada to have a free trade agreement.
Kevin Yeo

Canada should match U.S. exemptions for cross-border travellers - The Globe and Mail - 1 views

  • We have learned this month that the Canadian government is resisting efforts by the United States to increase exemptions for cross-border travellers in both countries. We believe this is a mistake. Canada’s interests are generally better served by lower trade barriers with the United States.
  • First, under NAFTA, most products manufactured in the United States or Mexico are not subject to Canadian duties. Therefore, the duties collected are on the small fraction of goods manufactured overseas. Indeed, a 2007 Senate report noted that customs revenues amounted to just $95-million annually – just 0.04 per cent of federal revenues.
  • Cross-border purchases pressure Canadian retailers to be more competitive and provide better, cheaper services to Canadian shoppers.
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  • we must recognize that public policy should be designed to benefit all Canadians, rather than a few large retailers. The currencies of resource exporters such as Australia, Canada and Brazil have appreciated sharply in recent years. We should all enjoy the higher standard of living the strong dollar entails, rather than allowing retailers to monopolize these benefits.
  • Therefore, we must embrace, rather than reject, the economic forces that drive the new U.S. thinking on this issue. Matching the $1,000 exemption would help Canadians realize greater gains from trade, while allowing CBSA to focus on its core mission.
Kevin Yeo

How national borders impede global trade - The Globe and Mail - 0 views

  • Two-way trade between the United States and Canada amounted to nearly $750-billion in 2008 before falling to $600-billion in 2009, thanks largely to the decline in energy prices and weakness in the auto sector; in both areas, Canada is the United States’ largest foreign supplier.
  • Thus, Canada’s $100-billion drop in exports to the United States between 2008 and 2009 was three times as large as the decline in Canada’s GDP during that period.
  • The point is not that internal trade flows or barriers to them are unimportant: in large countries, in particular, internal trade is often significantly larger overall than international trade and therefore even relatively small impediments to it can matter a great deal.
Kiruban Mahadeva

Canada 2011 Budget: Flaherty Budget Speech (Text) - Bloomberg - 1 views

  • The global economy is still fragile. The U.S. and our other trading partners are facing challenges. Compared to other countries, Canada's economy is performing very well-but our continued recovery is by no means assured. Many threats remain.
  • Securing our recovery from the global recession The Next Phase of Canada's Economic Action Plan is critically important
  • Now is not the time for instability. It would make it harder for Canadian businesses to plan and to expand. It would drive investment away to other countries. It would jeopardize the gains we have made.
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  • We will keep taxes low. We will undertake additional targeted investments to support jobs and growth
  • massive tax increases
  • We will not give in to Opposition demands to impose
  • This reckless policy would lead to continuing deficits and higher taxes on all Canadians. It would stall our recovery, kill hundreds of thousands of jobs and set families back.
  • Sustained growth comes from the private sector. We will help businesses to create jobs. We will not raise taxes on growth.
  • Since July 2009, the Canadian economy has created more than 480,000 new jobs-more than were lost during the recession
  • we remain concerned about the number of Canadians looking for work
  • We need to keep protecting and creating jobs now
  • Keeping taxes low A key part of that foundation is low taxes.
  • Our government has delivered tax relief for all Canadians
  • Our tax cuts are also helping employers to invest, grow and create jobs.
  • Our commitment to low taxes is supported by a strong consensus: that protecting Canada's tax advantage is key to securing our recovery.
  • Canadian industries Even so, in the current global economic climate, many businesses remain hesitant to invest and to hire.
  • Our government will take further action to encourage them to expand and create jobs.
  • The Hiring Credit for Small Business will provide a one-year EI break for some 525,000 Canadian small businesses
  • Expanding international trade Beyond this, we will promote new export opportunities for all Canadian businesses
  • We need to keep expanding our access to foreign markets, to create new jobs here at home.
  • We will provide greater financial security for Canadians, and practical help to make ends meet.
Steven Iarusci

Report cautions that over-indebted consumers can't drive economy - 0 views

  • a rate hike may come in the fall
    • Steven Iarusci
       
      Interest rates
  • the main message is that consumers cannot be the main engines of economic growth over the next couple of years,” the authors conclude. “Instead, the economy will have to rely on other sources of growth, such as exports and business investment.”
  • Canadians have “eased off the debt-accumulation throttle,”
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  • still net borrowers, meaning they borrow more than they save
  • consumer spending will not be the engine of economic growth in the coming quarters and the inevitable future rebalancing of monetary policy will be a shock to many households
  • some of the drop in household indebtedness is explained by strong income gains, not by debt repayment per se
  • sustainable personal growth is likely in a range of 4.0-4.5 per cent. Credit continues to grow at a pace that is two percentage points above that
  • the level of Canadian household debt — which in December officially surpassed those of our neighbours to the south — is unsustainable
  • total consumer debt load is reported to be about $1.5 trillion
  • Data released late last year suggested Canadians owed on average $112,000 — a figure that includes all kinds of debt, including mortgages — and a debt-to-income ratio of 150 per cent means they were spending $1,500 for every $1,000 in take-home pay
  • Factors that will moderate credit growth over the short term include spending fatigue, a soft landing in the housing market, stricter mortgage rules and Canadians preparing for the higher interest rates that are sure to come as the economy recovers.
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