GHY Tradelines

(CBC News)

Bank of Canada governor Mark Carney is leaving Canada with some parting advice – seize the country’s natural advantages.

The central banker said Tuesday in his last scheduled public appearance before departing for the Bank of England next month that Canada can coast and wait out the decade-long damage-repair process in the rest of the G7 economies, or build on its strengths for the emerging new global economy.

Carney said the Canadian government is correct in seeking out new trade deals, particularly in emerging economies, because they represent one half of the world’s imports growth and also are essential to securing a position in global supply chains.

Export growth needed
The speech to the Montreal Board of Trade, notes of which were released in Ottawa, read somewhat like a valedictory address in which the banker was full of praise for the country’s achievements and endowments, while also urging it on to future successes.

Carney broke no new ground in the speech as he has long stressed the need to transition Canada’s exports-based industries from reliance on slow-growing economies like the U.S. and Europe to fast-growing markets in China and Asia in general. But the advice took on added currency given it was likely the last time he will pronounce generally on the Canadian condition for at least the next five years, the term of his posting in London. Read more here.
 

(Peter Hall – Huffington Post)

International trade will be a key growth driver for the Canadian economy this year and next. However, the distribution of export growth in Canada’s provinces is anything but even. Some are leading the charge, while others are steady at the national pace. Others are lagging behind, some quite seriously. What are the key factors influencing the different growth patterns?

On top of the heap are British Columbia and Nova Scotia. Surging forestry exports are a big reason that B.C. will see 12% growth this year and a further 11% in 2014. Wood shipments to the reviving US market will add to the robust increase in exports to China. BC will also get a solid boost from mineral exports, thanks to new mining production. Nova Scotia will see the same growth rates, except the years are flipped around. It’s largely an energy story for Nova Scotia, with Venture and Deep Panuke causing output to double this year and double again in 2014. The return of NewPage supercalendered paper production will boost forestry exports by 15% in 2013. Read more here.
 

(Reuters)

Lower exports and slightly higher imports pushed Canada’s trade deficit in February up to C$1.02 billion ($1.01 billion) from a revised shortfall of C$746 million in January, Statistics Canada said on Friday.

Market operators had expected a modest surplus of C$200 million after the initial C$237 million deficit reported in January. Read more here.
 

(Toronto Star)

China and India will be vital destinations for Canadian exports in 2030, according to a forecast on trade released Monday. Though the U.S. will remain Canada’s top trading partner, emerging markets are becoming crucial, the latest HSBC Global Connections Trade Forecast said.

“The surprise is just how quickly companies are embracing the move towards being more international and being less reliant on the U.S., and how fast some of these individual trade corridors are growing,’ said Ben Arber, head of global trade and receivables finance, HSBC Bank Canada.

In 2011, the top five markets for Canadian exports were, in order, the U.S., the U.K., China, Japan and Mexico. China became Canada’s second-largest trading partner last year, Arber pointed out. The value of Canadian goods exported to China reached $19.3 billion last year, ahead of the $18.6 billion worth of goods shipped to the U.K., according to figures compiled by Industry Canada. Read more here.
 

(Pav Jordan – Globe & Mail)

Canada will announce agreements on Monday designed to help promote trade with Cameroon and Zambia, home to iron ore and copper and other mineral deposits, attracting the attention of some of the world’s largest miners.

The so-called foreign investment promotion and protection agreements, known as FIPAs, are designed to help protect Canadian investment abroad through legally binding provisions and to promote foreign investment in Canada.

“Our government is helping create jobs, growth and prosperity for families in every region of our country by ensuring investments by Canadian businesses are protected abroad,” Mr. Ed Fast, minister of international trade and minister for the Asia-Pacific gateway, said in a statement regarding the announcement. Read more here.
 

(Dallas Morning News)

If President Barack Obama were graded on trade policy, he’d probably get a gentleman’s C, and only that high because he had former Dallas Mayor Ron Kirk as his tutor.

Kirk, who was part of Obama’s White House team from Day One, will leave his post as U.S. trade representative next month, the latest in a growing list of officials who have opted not to stay on for the president’s second term.

Both as a candidate and as president, Obama has displayed an uneasy relationship with business, free trade and globalism. Not so for Kirk, who as Dallas mayor promoted both international trade — as part of the city’s economic agenda — and the North American Free Trade Agreement.

At the top of Kirk’s accomplishments in Washington are prominent pacts with Colombia, Panama and South Korea. Negotiations began during George W. Bush’s administration, but it was Kirk who jump-started and completed the deals after winning additional political and economic promises. More recently, he has been a central player in U.S.-Asian trade talks. Read more here.
 

(Bloomberg)

President Barack Obama is set to notify Congress early next week that the U.S. plans to participate in trade talks to lower national barriers to financial services, telecommunications and express delivery, according to people familiar with the decision.

U.S. Trade Representative Ron Kirk’s office is preparing a 90-day notification to Congress that it will take part in so-called trade in services negotiations at the World Trade Organization in Geneva, the people said. They declined to discuss the process on the record before a formal announcement.

Services are a growing portion of international trade, accounting for about $8 trillion in 2011, according to WTO statistics. The countries involved in the talks account for about 70 percent of global commerce.

Discussions probably will cover the cross-border movement of financial data, information and communications services, maritime, environmental and energy services and government procurement. Read more here.
 

The U.S. International Trade Commission (USITC) has released data for 2011 regarding changes in trade with key U.S. partners and for individual U.S. industries, along with a user survey it hopes will help the agency identify ways to revise and improve its data presentation and analysis in this area.

The USITC, an independent, nonpartisan, factfinding federal agency, compiles the information and releases it in an annual web-based report. The report provides details and analysis for key shifts in merchandise trade and can be searched by country or industry group and subgroup. Certain of the trade data are also updated each quarter on the USITC website.

The USITC is not publishing its annual report this year while it evaluates its trade shifts reporting to ensure that it is presenting data and analysis in ways that users find useful and timely. The agency is actively seeking input from users through a brief survey, which is posted on its web site.

The trade data for 2011 can be found here.  The survey can be found here.  
 

(The Montreal Gazette)

Quebec, Maritimes will continue to struggle, think-tank says

The Conference Board says Ontario’s economy is holding up against a double-barrel dose of austerity from both the federal and provincial governments and is poised for a modest rebound.

The Ottawa-based think-tank says federal and provincial government efforts to reign in deficits will limit growth in Canada’s largest province to 1.8% this year.

But with the U.S. economic recovery gathering steam, Ontario will ride that rebound to growth rates of 2.1% in 2013 and 2.6% in 2014. Read more here.
 

(Bloomberg Businessweek)

He had to find something to export, fast. His father mentioned that one of his childhood friends in his native town of Morrison, some 120 miles away, founded an agricultural parts company. With a few phone calls, Españon became a sort of sales agent for the manufacturer, Industria Caillet Bois. When he spoke to his foreign bike suppliers, he began asking whether they could put him in touch with agricultural resellers in their areas who might want a good deal on a zaranda.

Until he began exporting them, Españon had never heard of a zaranda, which he defines as “a square thing with a bunch of holes.” (It’s a perforated metal sheet used to sift grains.) He says he has no idea how many have been sold in his name. “The only thing I want to have in my head is making bikes, not doing this other thing,” he says. “But whatever, the government asks for it and you do it.”

The absurdity of this “compensation” system—beyond requiring businesses to export goods they’ve never heard of—is that it often doesn’t even add new exports. Instead, it creates a kind of international trade three-card monte game. Many importers pay exporters a commission to shift existing exports to their name to make the government think they’ve compensated for their imports. Says Martín Redrado, president of Argentina’s central bank from 2004 to 2010: “Exporters are getting about 7 percent or 8 percent for doing nothing, so they are quite pleased.” Read more here.
 

(STR Trade Report)

Trade statistics released Nov. 8 by the Department of Commerce show that the monthly U.S. trade deficit in goods and services fell to a two-year low in September, dropping 5.1% to $41.5 billion. Exports and imports both reversed a two-month slide, rising $5.6 billion and $3.4 billion, respectively. Compared to a year earlier, the September trade deficit was down $2.9 billion as exports gained $6.4 billion (3.5%) and imports rose $3.4 billion (1.5%).

According to the DOC, the deficit in goods trade shrank by $1.4 billion in September to $57.5 billion. Exports of goods rose $5.4 billion from the previous month to a record high $134.0 billion while imports increased $3.9 billion to $191.5 billion. The services surplus rose to $15.9 billion as exports hit a record high of $53.0 billion and imports fell $0.6 billion to $37.1 billion.

The bilateral trade deficit with China resumed its upward climb but gained only 1.4% to $29.1 billion. The U.S. also ran deficits with the European Union (down 26.5% to $8.6 billion), Germany (down 8.8% to $5.2 billion), Japan (down 28.4% to $4.8 billion), Mexico (up 6.7% to $.8 billion), Canada (down 13.6% to $1.9 billion), Ireland (down 33.3% to $1.6 billion), Taiwan (down 7.1% to $1.3 billion), Korea (down 18.8% to $1.3 billion), Nigeria (up 9.1% to $1.2 billion) and Venezuela (down 50% to $1.1 billion).

The U.S. continued to run surpluses with several trade partners in September, including Hong Kong (up 4.8% to $2.2 billion), Australia (up 5.6% to $198 billion), Singapore (down 22.2% to $0.7 billion) and Egypt (up 50% to $0.3 billion).
 

(Barry McKenna — Globe & Mail)

There are now clear signs the global slowdown is weighing on trade flows as half the Group of Eight, including Canada, released their September trade figures Thursday.

Two of the world’s trade juggernauts – Germany and Japan – are stumbling badly. German exports fell 2.5 % from a month earlier as the euro crisis starts to take a heavy toll on the region’s largest and strongest economy. Exports to its European Union brethren were off 3.4%.

European Central Bank chief Mario Draghi said bluntly Thursday that Germany is no longer “insulated” from the turmoil in the euro zone.

Exports also tumbled 3.3% in Japan, continuing a decade-long trend there. The country continues to run a current account surplus – a measure of trade, tourism and investment flows – but it’s falling fast (nearly 70% from year ago). That raises the ominous possibility that Japan may some day run a deficit, challenging its ability to finance its massive government debt from domestic savings alone. Read more here.
 

(Better Farming – Susan Mann)

Federal government’s aggressive focus on international trade obtains mostly thumbs up from Canada’s farm community

The federal government says it’s currently undertaking the most ambitious trade expansion plans in Canadian history but farm community reaction to the direction is mixed.

Representatives from the farm community were asked their opinions in response to today’s release in Ottawa of the 2011-12 Agriculture and Agri-Food Market Access Report, issued by Agriculture Minister Gerry Ritz and Ed Fast, minister of international trade.

Al Mussell, senior research associate with the George Morris Centre, an agricultural think tank in Guelph, says Canada needs to trade farm products to fully utilize its large arable land base and capacity to produce food that is far greater than what the domestic market needs.

Mussell has not yet seen the report but notes the federal government has been very clear and consistent in its message promoting trade and new agreements as a driver of economic growth. It’s a “laudable and very rational strategy,” he says. “If we try to have everything that we produce in Canada or in Ontario or virtually in any province come to market in that area, prices would be pretty darn low or we’d have to take valuable land out of production.” Read more here.
 

(Julian Beltrame — The Canadian Press)

Canada’s trade performance beat expectations in September with a smaller than expected deficit of $826 million, but economists note the sector remains a major drag on growth. The trade report from Statistics Canada found the deficit shrinking by almost half from a downwardly revised $1.5 billion in August, aided by a welcome 1.9% uptick in exports.

Analysts said the performance was encouraging given the weakness in export markets, particularly the U.S. and Europe. Economists had expected another $1.5 billion deficit. But they noted that on the back of soft August and July numbers, the third-quarter tally will still weigh heavily on the economy.

“September’s trade report confirms that exports were a major drag on overall third-quarter gross domestic product growth, with net exports subtracting possibly as much as three percentage points,” said David Madani of Capital Economics. Read more here.
 

(Global News)

The outcome of the U.S. election this week could have huge implications for trade between Canada and the United States, Ambassador Gary Doer says.

“I think we’re going to see a challenge right after the election,” the Canadian ambassador to the United States said Sunday during an interview on the Global News Program The West Block with Tom Clark.

A few issues are at play, Doer said, including the fact that some tax cuts are going to expire, there is an anticipated slowdown in the economy, and the United Sates government is expected to curb spending.

“Combined, those three issues are going to be crisis issues for Canada,” he said. “If there’s no resolution down the street here, it will impact the GDP of the United States, which will impact the demand for products from Canada.”

That, Doer said, is the short-term reality Canadians and Americans will wake up to Wednesday morning.

Beyond that, however, the outlook in the U.S. appears positive, the ambassador said.

“In the long run, the economy is starting to see a lot of good, positive signs which, of course, is good for Canada,” he said. Read more and watch the video here.
 

(Taras Berezowsky — Metal Miner)

With the presidential election fast-approaching, at least one person in the final general session of the Aluminum Association’s annual meeting in Chicago is sorely displeased by how little attention is paid to the international trade picture.

“Trade issues are more important than what the presidential candidates are talking about…I’m disappointed they’re not talking more about this,” said Michael Stumo, CEO of the Coalition for a Prosperous America (CPA).

And there are likely many more folks feeling this way who work for US metals producers — especially steel. Read more here.
 

(The Globe & Mail – Barrie McKenna)

Forget the high dollar, Dutch disease, cheap imports and the global economic slump. Canadian manufacturers are surprisingly optimistic about the future.

In fact, most of them plan to boost spending, hire more workers and generate higher profits over the next three years, according to a survey of nearly 650 factory executives by the Canadian Manufacturers and Exporters (CME) to be released Thursday. The upbeat findings are in stark contrast to the prevailing sense of gloom about manufacturing among many analysts and policy makers.

“That’s what I see out there – a lot of optimism,” CME chief executive Jayson Myers said in an interview. “Canadian companies have weathered the deepest recession since the 1930s, and the companies that have survived have found more market opportunities. Many of them are busier than ever.”

Among the key survey findings, 73% are forecasting higher profits, 77% expect to boost output, 83% are looking for higher sales and 71% say they will add workers, according to the survey conducted between May 22 and July 1. Sixty-six percent intend to increase spending on machinery and equipment, and 55% said they would spend more on research and development. Read more here.
 

(Mississauga.com – Chris Clay)

International Trade Minister Ed Fast appeared at the Living Arts Centre on Monday to address the Canadian Association of Importers and Exporters.

Fast highlighted some of the federal government’s recent accomplishments and immediate plans to increase trade.

Since 2009, Fast said, the government has eliminated more than 1,800 tariffs, including all those on imported machinery, equipment and manufacturing inputs. They’ve removed the monopoly power of the Canadian Wheat Board and have allowed more competition in the telecommunications sector. As well, they’ve brought in a new copyright law that he called more “modern, flexible and in-line with current international standards” to protect Canadians. Read more here.
 

(Erik Wasson – The Hill)

GOP presidential candidate Mitt Romney hit President Obama on trade in a major foreign policy speech at the Virginia Military Institute on Monday.

Romney said that at this point, the United States has “no trade agenda to speak of.”

“The president has not signed one new free-trade agreement in the past four years. I will reverse that failure. I will work with nations around the world that are committed to the principles of free enterprise, expanding existing relationships and establishing new ones,” Romney added.

Although Obama employed anti-free-trade rhetoric during the 2008 campaign, he has governed differently.

Obama renegotiated three free-trade agreements that were signed by former President George W. Bush with Panama, Colombia and South Korea and worked with Congress to get them approved. He has not signed any new free-trade agreements, however.

The Obama administration is moving forward with a Trans-Pacific Partnership (TPP) regional free-trade agreement that was also started by Bush. Read more here.
 

(Daniel Akst – WSJ Blog)

Could limiting trade, perhaps through emissions tariffs, combat global warming? Some people think so, since Western nations typically import items that produce significant greenhouse emissions in developing countries.

But two European climate change experts are doubtful such tariffs would do much good. In fact, in a new paper, they suggest that, absent international trade, developing nations such as China might emit even more greenhouse gases than they already do. Read more here.