Transcript 311 orientation - McGill University

Chap 11 - International Trade
Trends in Merchandise & Agri-Food Trade
Inter-regional vs International Trade
language & culture
specialized transport services
government regulatory differences
how prices and exchange rates collide
Trends in Merchandise Trade
Exports and Imports 2002 - 2010 ($CA Million - current)
500000
480000
460000
440000
420000
400000
380000
Imports
360000
340000
320000
300000
2002
2003
2004
2005
2006
2007
2008
Source: Statistics Canada, CANSIM, table (for fee) 228-0003 228-0043
2009
2010
Source: Statistics Canada, The Daily
Exports of Goods – $million (current)
2002-06
2007
2008
2009
2010
429593
463120
488754
369343
404834
Agricultural and fishing products
Energy products
Crude petroleum
Natural gas
Forestry products
30483
70304
26728
27126
36180
34738
91292
40997
28071
29267
40859
125728
60970
33046
25355
37238
79835
42503
15749
19529
36938
90886
50111
15619
21851
Industrial goods and materials
Machinery and equipment
Automotive products
Passenger autos and chassis
Trucks and other motor vehicles
Motor vehicle parts
Other consumer goods
78682
92851
88905
45477
16119
27309
17439
104776
93432
77007
39989
13029
23989
18738
111321
92214
61156
34076
7334
19745
18172
79145
80158
43811
26287
3758
13767
17935
96489
76095
56783
37603
2310
16870
16428
Exports
Source: Statistics Canada, CANSIM, table (for fee) 228-0003.
NB - not all sectors represented in table
Imports of Goods – $million (current)
2002-06
2007
2008
2009
2010
371074
415683
443777
374081
413833
Agricultural & fishing products
Energy products
Forestry products
22029
25914
3107
25531
37299
2990
28511
53173
2856
29348
33951
2385
29579
40549
2648
Industrial goods and materials
Machinery and equipment
Automotive products
Other consumer goods
74077
106886
78710
48398
85352
116583
79956
54784
92088
122642
71959
57608
75068
107897
55321
57518
86926
113878
68713
57771
Imports
Source: Statistics Canada, CANSIM, table (for fee) 228-0003 228-0043
NB - not all sectors represented in table
Imports, exports & trade balance of goods, by country
2 0 0 2-0 6
$ millions
2007
2008
2009
2010
4 2 99 4 1 4 6 3 1 2 0 4 8 8 7 5 4 3 6 9 3 4 3 4 0 4 8 3 4
Exports
81%
United States1
Japan
United Kingdom
Other European Economic
Community countries
O t h e rO E C D 2
Other countries3
Imports
351167 355732 370005 271109 296672
9717
8862
11784
10027
10106
16986
13046
14029
14152
8860
18056
14479
27274
24393
19744
39074
25174
20749
47013
19010
16691
40626
19476
17908
44076
3 7 1 0 8 44 1 5 6 8 34 4 3 7 7 73 7 4 0 8 14 1 3 8 3 3
United States1
Japan
United Kingdom
Other European Economic
Community countries
Other OECD2
Other countries3
254113 270067 281535 236290 259953
10067
9329
11672
11967
11113
9561
8530
11233
9963
9 4 89
Balance
5 8 8 5 7 4 7 4 3 7 4 4 9 7 7 -4 7 3 8 -8 9 9 9
U n i t e d tSa t e s 1
Japan
United Kingdom
Other European Economic
Community countries
Other OECD2
Other countries3
28162
21924
46284
97054
-1 0 0 7
-6 2 9
32404
25160
66123
85665
-1 9 4 0
4189
35461
27380
76496
88470
113
2796
30241
25962
63730
34819
-4 6 7
4516
30788
29013
74451
36719
-3 5 1
7425
-8 0 1 1 -1 0 2 8 8 -1 1 2 3 0 -1 1 3 1 3
-1 0 1 0 6
-9 2 7 1 -1 1 1 0 5
-6 6 3 2
-5 4 1 6
-7 4 4 5
-1 9 0 1 0 -2 7 0 4 9 -2 9 4 8 3 -2 3 1 0 5 -3 0 3 7 5
Source: Statistics Canada, CANSIM, table 228-0003.
73%
Trends in Agri-Food Trade
Canada as an exporter
47% primary (farm) output exported
~ $30 - 35 billion $5 - 6 Billion trade surplus
4th largest exporter of agr products (2009)
3.4% of world exports: EU (48%) US (11%) and Brazil (6%)
Export markets (2009)
United States
50% of agri-food exports
Japan
8%
EU 6%, China 7%
Products:
grains + products (28%)
oilseeds + products (20%),
livestock + products (18%)
Source: Agriculture and Agri-Food Canada, An overview of the Canadian Agri-Food System, 2011, Ottawa
55% Primary
1997
52% Primary
2009
71% of imports are processed (2009)
Canadian Agri-Food Imports
Imports (2009)
.
2.8% World Imports
US is largest source (~ 61% )
EU (13%) , Mexico (4%)
Products:
fruit & vegetables + processed products (28%)
beverages (ex fruit juice) (13%)
Exports vs. Imports
complementary - competitive imports
gains from trade
import sources becoming more diverse
International vs. Interregional Trade
Language and culture
communications
transactions costs (“gifts”)
Transportation requirements
clear rules of transaction
freight costs, load/unload
transfer of ownership (incoterms: EXW, FAS, FOB)
insurance
documentation
Government regulation
Phyto-sanitary
Transport
Food labelling & packaging
Import/export agencies
Country of origin
Transactions Costs
International organizations
Facilitate trade
Bilateral - regional (NAFTA)
Multinational (WTO, Codex Alimentarius Commission)
Exchange Rates
Two prices in every trade
another transaction cost
ER volatility (post 1970’s)
significant effects on trade & profitability
dealing with exchange rates
- fixed versus floating rates
Canada vs China
- role for forward exchange markets
Canada-US exchange rate - recent history
Jan 2002
(1.60/0.63)
$US per Canadian Dollar 2002 - 2011
60% appreciation
Source: Globe & Mail - Globe Investor
$Euro per Canadian Dollar 2002 - 2011
Source: Globe & Mail - Globe Investor
$US per Euro 2002 - 2011
$US per Chinese Yuan Renminbi 1982 - 2011
China Daily, Oct 27, 2011