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Transcript of Teaching About the Worlds Largest Trade Relationship (AKA: 10 Things You Should Know About the...
Teaching About the World’s Largest Trade
Relationship (AKA: 10 Things You Should Know About the Canadian Economy)
2011 STUDY CANADA Summer Institute Dr. Paul A. Storer
Source:http://sbadrinath.files.wordpress.com/2009/03/different26rqcu3.jpg?w=400&h=226
1. Canada is our largest trading partner ….
1. … and we share the world’s largest bilateral trading relationship
2. Canada is the most important export destination
for 70% of the 50 states
Source: http://www.canadainternational.gc.ca/washington/
Canada’s Rank for States’ Exports of Goods
0
2
4
6
8
10
12
14
16
18
20
Sh
are
(%)
California Oregon Washington
State Export Shares in 2009
Canada
China
Japan
Malaysia
Canada
Mexico
Canada
China
Japan
0
5
10
15
20
25
30
35
40
45
50
Sh
are
(%)
Michigan Ohio Pennsylvania
State Export Shares in 2009
China China China
Canada
Canada C
anada
Me
xico
Mexico Mexico
0
5
10
15
20
25
30
35
Sh
are
(%)
Colorado Georgia North Carolina
State Export Shares in 2009
China
China
Netherlands
Mexico
China
Canada
Mexico
Canada
Canada
Source: Kasoff, Drennen, & Storer Chapter
Trade as a Fraction of U.S. GDP
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
1929 1939 1949 1959 1969 1979 1989 1999
• (Exports + Imports)/GDP
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
• Trade As a Fraction of GDP: Canada
3. Canada is the biggest source of U.S.
petroleum imports
U.S. Petroleum Imports (2009)(Source: U.S. Energy Info. Agency)
• Source: “The World’s Largest Trading Relationship”,
• Embassy of Canada.
•Source: http://www.pse.com/energyEnvironment/EnergySupply_NaturalGasProfile.aspx
Oil Sands
Reserves
• Source:• www.ubc.ca
• Source: www.guardian.com
B.C. Carbon Tax Program
4. Canada’s economy is very advanced and trade is often
“apples for apples”
The Modern Canadian Economy: Technology
Transportation
SeaTac Airport Shuttle Trains:
•Source: http://www.visitingdc.com/images/seatac-train.jpg
SeaTac Airport Shuttle Trains:Made in PA by a Canadian Company
•Source: http://farm4.static.flickr.com/3379/3198460812_79dd9093c2.jpg
Making Things Together:Specialization, Scale and“Apples for Apples” Trade
Ford Edge:Oakville, Ontario. Canada cbc.ca
North American Specialization
Ford Escape:Kansas City, MO
5. The Canadian economy is strong and quite competitive
Source: The Economist
5. … Canadians are shopping for bargains in the United States
6. Trade isn’t just goods: Trade in services and foreign
investment
The Economist, U.S. Edition, January 22, 2011
•The Economist, U.S. Edition, May 23, 2009
Source: http://hockeygonewild.wordpress.com/2010/03/09/
Identify the symbols and logos:
http://www.flickr.com/photos/achimh/4368189976/sizes/l/in/photostream/
7. Canada had a long history of protecting its economy from
U.S. competition
Source:Hart, M.A Trading Nation
The Tariff “Wall”
“Greedy”AmericanWolves
Happy Canadian Farmers AndManufacturers
Sir John A.Macdonald
Source: Hart, M. A Trading Nation
Source: Hart, M. A Trading Nation
8. Canadians and Americans fear the border – but for
different reasons
Trade, Culture, and Sovereignty
• Source: Aislin Cartoon
• Montreal Gazette
Source: Molson
“I Am Canadian” ad
•Canada: A Source of
“Vulnerabilities?”
Source: Bellingham Herald
• Source: ABC news • Source: International Border Commission
•Source: U.S. Customs and Border Protection
Delays and
Displacement:Just-in-time
orJust-in-case?
9. Canada’s economy has performed well under free trade
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2.0
4.0
6.0
8.0
10.0
12.0
14.0
Canada
United States
Unemployment Rates
2
3
4
5
6
7
8
9
10
11
Jan-
00
Jul-0
0
Jan-
01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Jan-
09
Jul-0
9
Jan-
10
Jul-1
0
Canada
United States
December 2010 - Canada: 7.6%, United States: 9.4%
Total Employment(January 2007 = 100)
94
95
96
97
98
99
100
101
102
103
104
Canada
United States
Wall Street Journal, Monday January 3, 2011
10. NAFTA is much less ambitious than the European
Union (and isn’t even a complete free trade
agreement)
NAFTA and Rules of Origin
• Rules of origin grant access to NAFTA tariff preferences.
• Compliance costs are non-trivial.
• Rules limit a “perimeter” approach.
U.S. Commerce Department
Guide
Regional Value Content Example
U.S. – Canada Softwood Lumber Agreement 2006
•January 2007
Products Subject to SLA 2006• Softwood lumber products processed in Canada and
imported into the US and classified in Chapter 44 of the HTS
• 2007 HTSUS
• 4407.10.01
• 4409.10.05
• 4409.10.10
• 4409.10.20
• 4409.10.90
• *4418.90.2500
• *4418.90.4690
• *4421.90.7040
• *4421.90.9740
•* Lumber products classified in these tariff numbers that do not conform to the specifications of the exclusion in Annex 1A(4) are subject to SLA 2006
•2006 HTSUS•4407.10.00
•4409.10.05
•4409.10.10
•4409.10.20
•4409.10.90
•*4418.90.4590
•*4421.90.7040
•*4421.90.9740