Teaching About the Worlds Largest Trade Relationship (AKA: 10 Things You Should Know About the Canadian Economy) 2011 STUDY CANADA Summer Institute Dr. Paul A. Storer Source:

1. Canada is our largest trading partner ….

1. … and we share the worlds largest bilateral trading relationship

2. Canada is the most important export destination for 70% of the 50 states

Source: / Canadas Rank for States Exports of Goods

Source: Kasoff, Drennen, & Storer Chapter

(Exports + Imports)/GDP

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 Worlds Largest Trading Relationship, Embassy of Canada.

Source:

Oil Sands Reserves Source:

Source:

B.C. Carbon Tax Program

4. Canadas economy is very advanced and trade is often apples for apples

The Modern Canadian Economy: Technology

Transportation

SeaTac Airport Shuttle Trains: Source:

SeaTac Airport Shuttle Trains: Made in PA by a Canadian Company Source:

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 isnt 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: Identify the symbols and logos:

7. Canada had a long history of protecting its economy from U.S. competition

Source: Hart, M. A Trading Nation

The Tariff Wall Greedy American Wolves Happy Canadian Farmers And Manufacturers Sir John A. Macdonald

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 newsSource: International Border Commission

Source: U.S. Customs and Border Protection

Delays and Displacement: Just-in-time or Just-in-case?

9. Canadas economy has performed well under free trade

December Canada: 7.6%, United States: 9.4%

Wall Street Journal, Monday January 3, 2011

10. NAFTA is much less ambitious than the European Union (and isnt 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 * * * * * 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 HTSUS * * *