The last 10 years have been a “lost decade” for Canadian exporters as the increase in imports far outstripped export growth, says a report from CIBC World Markets.
Trade analysts said Canadian exports, including grain and oil-seeds, made headway in the massive Chinese market, but overall trade performance was mediocre and there was little increase in sales to emerging markets, which are the future of trade success.
“Global trade in goods has surged by 70 percent since 2002,” said the April 17 CIBC report.
“In Canada, the volume of imports has risen by 45 percent while the volume of exports was essentially unchanged. Regardless of how you look at it, this was a lost decade for Canadian exports.”
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Other than increases in exports to China, including oilseeds, grain and fruit, Canada has largely remained dependent on the U.S. market and failed to break into developing markets.
“For a small, open economy, this is not a positive trajectory,” said the report.
Don’t tell that to Canadian agriculture.
The Canadian beef sector began the decade shut out of world markets because of BSE and watched as markets re-opened over the next 10 years.
“I’d say given where we started, this has been a good decade for us, getting back into many markets we were shut out of,” said John Masswohl, the Canadian Cattlemen’s Association’s director of government and international relations.
“With some of the trade negotiations now on, I think we see considerable opportunity ahead.”
Richard Phillips, chair of the Canadian Agri-Food Trade Alliance and executive director of Grain Growers of Canada, said Canada’s emphasis on stalled World Trade Organization talks limited gains in agricultural market access in the first half of the decade, but the last five years have seen attempts to expand agricultural exports through bilateral deals.
“The first half of the decade, we boxed ourselves in with WTO and that is going nowhere,” he said.
“I think we have moved our view broader and now there are bigger opportunities on the horizon.”
Agricultural exporters expect significant new opportunities from trade negotiations now starting or underway with the European Union, India, Japan and South Korea.
“I think moving beyond the WTO, the big trade deals for the sector are on the horizon,” said Phillips.
“Of course, we have to seal some of those deals.”
He said Canadian trade attention has moved away from WTO negotiations.
World agriculture and trade ministers will next gather for a WTO meeting in December in Bali, Indonesia. The multilateral trade negotiation, which was launched in 2001 in Doha, Qatar, appears stalled.
Last week in Geneva, outgoing WTO director general Pascal Lamy warned that the December meeting of ministers will make no progress if countries do not show a willingness to make compromises.
“The stark reality is that the current pace of work is largely insufficient to deliver successfully in Bali … but more than changing the pace of work, we need a change in mindset,” he told an informal trade meeting.
“We need to move from exploring and understanding issues to closing gaps. We need to move from identifying what does not work to finding alternative solutions to reach consensus.”
The Doha Round threatens to be the first negotiation that failed to reach agreement.
WTO supporters warn that a failure to reach even a limited agreement would seriously undermine the credibility of the global trade organization, giving increased credibility to more limited regional and bilateral trade negotiations.
