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Canada Towards Foreign Trade Diversification

2011/2/11 15:25:00 42

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After the shopping season at the beginning of the year, many friends complained that Canadian things were more expensive than the United States.

There are two main reasons why Canada has high prices. First, commodities need to be increased by 13%.

commodity

The average consumption tax in the US is less than half of that in Canada, and some states do not even have a consumption tax. The two reason is that the US quantitative easing policy has led to the depreciation of the US dollar and the appreciation of Canadian dollar.

The appreciation of Canadian dollar not only has an impact on people's lives, but also challenges and impacts on foreign trade exports.

Canada has a small population and a small market, and its economic development is heavily dependent on foreign trade.

Trade

It accounts for more than 30% of the gross domestic product, which accounts for more than 70% of its foreign trade. The average cross-border trade volume between the United States and Canada is 2 billion US dollars per day.

Figures released by the Statistics Canada show that export earnings declined by 30% in 6 months, mainly due to the decline in US exports and the back leg of economic growth.

There are several reasons for the decline in exports to the US.

First, the pace of economic recovery in the United States is too slow, demand is weak, and orders are greatly reduced.

The two is the rise of protectionism in the US. Its "buy American" clause restricts the United States to the United States.

Exit

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Despite hard negotiations, Canada is temporarily excluded from the terms of "buy American goods", but this is only a temporary measure. The US Congress has been threatening to cancel this offer.

Three, in order to prevent terrorists from joining the border, the United States strengthened security inspections on the border between the United States and Canada and seriously impeded the smooth flow of goods.

The four is the appreciation of the dollar against the US dollar, which has led to a decline in export competitiveness.

Canada had hoped for a speedy recovery in the US economy, so it did not accuse the US of its quantitative easing policy.

It is now expected that Obama's "export doubling" plan will drive Canada's economic growth.

But this "export doubling" plan is doubtless a double-edged sword.

Optimistically, this plan will boost the manufacturing sector that supplies parts to the United States.

However, the proportion of us plus Canada trade to its global trade is less than 25%, while the US emphasizes "double exports" instead of "double imports", which is likely to have little effect on the growth of export volume.

In addition, the United States has been more forceful in dealing with trade disputes in recent years, such as in the cork trade dispute, forcing lumber exporters to pay a total of over 100 million Canadian dollars.

A trade lawsuit recently under arbitration is even more than $500 million.

The situation has forced the Canadian government to realize that it is no longer possible to put all eggs in one basket, and that foreign trade must be diversified.

Negotiations on the free trade agreement with the EU are in progress. If signed smoothly, there will be an increase of 12 billion Canadian dollars in GDP.

Recently, negotiations with India on the FTA have also started.

According to Premier Harper recently revealed that there were 50 trade negotiations with other countries.

In addition, the Canadian government launched the "Asia Pacific Gateway plan" more than a year ago, aiming to pave the way for Asian trade.

Recently, China's import of timber has brought Canadian timber companies back to life.

During President Hu's visit to the United States, he called on the government to start negotiations with China on free trade as soon as possible.

Canada's globe and mail commented on the topic of "the opening of the free trade zone with China as soon as possible, or else it is going to lag behind" in the headline of the commentary. It pointed out that China's economic scale and growth rate has been universally acknowledged. The long-term benefits brought about by establishing strong economic relations with China will be enormous for both sides. Sharing the success of China's development should become a top priority for the government.