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Chris Li

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

www.progressive-economics.ca/...de-wont-work-in-the-real-world

Free Trade Canada European Union

shared by Chris Li on 02 Jun 11 - No Cached
  • 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. 
  • ...5 more annotations...
  • 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

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

www.theglobeandmail.com/...singlepage

Trade Border US Canada

shared by Kevin Yeo on 03 Jun 11 - No Cached
  • 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.
Mike Seo

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

www.theglobeandmail.com/...article1981544

Trade Export Import

shared by Mike Seo on 01 Jun 11 - No Cached
  • 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.
  • ...3 more annotations...
  • 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.
Mike Seo

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

www.mysteinbach.ca/...10418.html

Trade Export Pork

shared by Mike Seo on 03 Jun 11 - No Cached
  • 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

www.theglobeandmail.com/...article2033327

Trade Border US Canada Exemptions

shared by Kevin Yeo on 03 Jun 11 - No Cached
  • 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

AmericanEconomicAlert.org Blog Network - 0 views

americaneconomicalert.org/blogger_home.asp

US Trade Deficit Export

shared by Kevin Yeo on 03 Jun 11 - No Cached
  • 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.
  • 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.
  • 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).  
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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 exporters face headwinds, new minister says | Reuters - 1 views

www.reuters.com/...my-trade-idUSN0225115820110602

Trade Export

shared by Mike Seo on 03 Jun 11 - No Cached
  • 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.
Dmitri Tkachenko

Surprise: Low interest rates seen sticking around - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2032075

Low Interest Rates Bonds Financial Industry Inflation Stock Market

shared by Dmitri Tkachenko on 25 May 11 - No Cached
  • Dmitri Tkachenko on 25 May 11
     
    "Interest rates have recently being going somewhere unexpected: down. With the United States government bumping up against its debt ceiling, inflation ticking upward, and a growing debt crisis in Europe, most expected interest rates to be increasing.If so, it will mean pain for savers, but good news for borrowers .A drop in interest rates is equivalent to a sale on the price of money, and corporations are already rushing to take advantage of the easy lending conditions, even if they're in no immediate need of funds. Mortgage rates have fallen, too - good news for homeowners looking to refinance. But lower rates have not turned out so well for some of the market's savviest players, including Bill Gross, the founder of Pimco, the world's biggest bond fund. Earlier this year, he sold his U.S. Treasuries, because he thought interest rates were poised to rocket higher, which would drive down prices of bonds. Oil has been trading consistently around the $100-a-barrel level, thereby lifting inflation, another bond-market negative. Investors are getting nervous and growing more willing to buy super-safe government bonds."
Kevin Yeo

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

www.theglobeandmail.com/...article2044537

Canada US trade future

shared by Kevin Yeo on 03 Jun 11 - No Cached
  • 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.
Kiruban Mahadeva

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

www.bloomberg.com/...herty-budget-speech-text-.html

Government Spending Taxes Debt

shared by Kiruban Mahadeva on 03 Jun 11 - No Cached
  • 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.
Susan Cui

Bad housing advice of the day, Philly edition | Felix Salmon - 4 views

blogs.reuters.com/...vice-of-the-day-philly-edition

Housing Price Advice Gold vs House

shared by Susan Cui on 23 May 11 - No Cached
  • house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
  • house prices are falling, gold prices are rising, and therefore before you go ahead and buy a house, you should probably consider whether you’d be better off buying gold instead.
  • homes are not an investment, they’re more of a consumption good.
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  • Maybe you’ve saved enough for a down payment. But should you bet your money on home prices, even with a tempting low-interest, fixed-rate mortgage? Or is it financially smarter to continue renting and invest the money in an asset that could appreciate for at least another few years?
  • Being “financially smart” is not the same as investing in whichever asset gives you the highest return over some given time horizon.
  • Essentially, Arvedlund is proposing an exotic relative-value trade here: she’s saying that houses will underperform gold, or that the price of a house in gold is going to go down rather than up.
  • the price of a house in gold has gone down, and you would have been financially better off buying gold than taking that money and using it as a down-payment for a house.
Alexei Goudzenko

Reimagining Food Systems in the Midst of a Hunger Crisis - IPS ipsnews.net - 0 views

ipsnews.net/news.asp

food systems reimagining

shared by Alexei Goudzenko on 04 Jun 11 - No Cached
  • "We can and must re- imagine other food systems that take numerous social dimensions into account."
  • These are poverty, caused by trade policies that dump heavily- subsidised produce from developed countries on third world markets, thus rendering local farmers jobless; environmental degradation brought on by industrialised farming, which now accounts for nearly one-third of global green house gas emissions; and an epidemic of malnutrition caused by the colonising effects of mono-crops and a flood of processed food from the global north to the global south.
  • Agro-ecology, which includes systems that produce their own fertiliser using materials and waste from the surrounding environment, is being increasingly viewed as the only viable solution to the hunger crisis. Since prices of fertiliser doubled during the 2008 food crisis, continents like Africa that import 95 percent of their chemical fertilisers could see radically different outcomes in production by adopting agro-ecological techniques.
Chris Li

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

www.theglobeandmail.com/...article2044537

Trade USA Canada Export

shared by Chris Li on 03 Jun 11 - No Cached
  • 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
  • ...2 more annotations...
  • “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.
Kiruban Mahadeva

The Canadian Press: Time for U.S. to deal with debt problem; spillover could hurt Canad... - 1 views

www.google.com/...M5gJ9kKsGOWKz-UmEeHBogtbF6PLHw

Debt GDP

shared by Kiruban Mahadeva on 02 Jun 11 - No Cached
  • concerned about the mounting level of debt in the United States and its potential to slow Canada's recovery
  • when debt exceeds 90 per cent of GDP, economic growth will slow, and that is a situation facing most of Canada's major trading partners, particularly the U.S
  • as markets lose patience with the pace of deficit reduction, the result will be higher interest rates that impact all
  • ...1 more annotation...
  • It's a transformation that sees emerging markets like China bound forward while advanced countries — Canada's traditional economic partners — muddle along through years of slow growth because of massive debt.
Benjamin Gray

Age of outperformance ends for Canadian banks - The Globe and Mail - 0 views

www.theglobeandmail.com/...article2034967

leverage

shared by Benjamin Gray on 03 Jun 11 - No Cached
  • Between 1990 and 2010, the Canadian prime rate declined by more than 10 percentage points, while inflation fell significantly. The result was a near-perfect environment for financial assets, pushing values for stocks and bonds ever higher.
  • Empowered by the regulator, the Canadian banks have leveraged their massive size and distribution powers to dominate virtually all the financial services sector.
  • The combined outcome was an explosion in trading and market-sensitive revenues, which grew by more than 15 per cent a year for two decades, and today are approximately 20 per cent of gross revenues. Although the process is not quite complete, the banks are also well on their way to dominating the domestic mutual fund business.
alex yesikov

Could Greece be the next Lehman Brothers? Yes - and potentially even worse | Larry Elli... - 0 views

www.guardian.co.uk/...ce-debt-crisis-lehman-brothers

Systemic Risk Banks USA Financial Crisis 2008 Greece

shared by alex yesikov on 02 Jun 11 - No Cached
  • It was less than three years ago that the failure of Lehman Brothers sent tremors through the global financial system, threatening the existence of every major bank and triggering the most severe economic crisis since the Great Depression. As Europe's policy elite met for fresh crisis talks today, the dark fear that haunted everyone around the table was this: if the bankruptcy of a middling-sized Wall Street investment bank with no retail customers could have such dire consequences, what would happen if the Greeks decide they have had enough and renege on their debts?
  • Could Greece, in other words, be the new Lehmans? Given the structure of modern financial markets, with their chains of derivative trades and their pyramids of debt, there is only one answer. Greece could certainly be the next Lehmans. The likelihood that a Greek default would pose a threat to the future of the eurozone as well as to the health of the world economy means it has the potential to be worse than Lehmans. Much worse.
  • To be fair, it's a tough one. A single currency that involved a hard core of European countries that were broadly similar in terms of economic development and industrial structure might just have worked. Bolting together a group of 17 disparate economies with different levels of productivity growth, different languages and different business cultures was an accident waiting to happen, and so it has proved.
Mike Seo

Canada firms may miss Chinese market - 1 views

www.calgaryherald.com/...story.html

Trade Energy Export China

shared by Mike Seo on 03 Jun 11 - No Cached
  • 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.
  • ...1 more annotation...
  • 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.
Chris Li

Offshoring and inshoring in the balance - The Globe and Mail - 3 views

www.theglobeandmail.com/...article2044775

Outsourcing Canada

shared by Chris Li on 03 Jun 11 - No Cached
  • Relatively few Canadian companies are offshoring or outsourcing their activities, according to the study, part of the department’s annual Canada’s State of Trade 2010 report.
  • Overall, just 1.9 per cent of Canadian-based companies moved an activity to a foreign country between 2007 and 2009. In manufacturing, the percentage was higher at 5.2 per cent, but still relatively low.
  • At the same time, 1.8 per cent of companies (and 5 per cent of manufacturers) shifted work into Canada -- so-called inshoring.
  • ...1 more annotation...
  • So it seems a bit of a stretch to conclude, as the DFAIT report does, that offshoring is “subdued.”
dylan huber

Economic news fl ash: Inequality is complex - 0 views

www.nationalpost.com/...story.html

Inequality Income OECD

shared by dylan huber on 02 Jun 11 - No Cached
  • in most places growth was more rapid at the top than at the bottom of the income distribution.
  • Canada's numbers were 0.9 and 1.6, the United States' 0.5 and 1.9.
  • incomes at the top grew more quickly than incomes at the bottom.
  • ...5 more annotations...
  • deregulation, free trade, fiscal conservatism (yes, that would be neo-liberal conservatism) -are rewriting the post-war economic and social contract at the expense of the poor and to the benefit of the rich.
  • globalization may be playing a part.
  • Technology also plays a role
  • Changes in household size do seem to be part of the problem. In most countries, there are fewer people per household. Across the OECD, the number of households with only one head has risen from 15% to 20% of the total.
  • If more families are smaller and therefore not enjoying such economies of scale, more are going to be poorer.
Chris Li

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

www.theglobeandmail.com/...article2024760

Export Food Restrictions Trade

shared by Chris Li on 03 Jun 11 - No Cached
  • 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.
  • ...2 more annotations...
  • 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”.
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