Canada’s tops in world trade

There are plenty of reasons to be proud Canadians – and I’m happy to highlight a few from the world of agriculture. The report FCC Ag Economics: A 2014 Look at Global Trade (ALAT) released today, shows Canada is the world’s top per capita trader of agriculture and agri-food products.

Trade is essential to Canada’s economy overall with exports second only to personal consumption in GDP contributions. Trade counts for even more in the agri-food supply chain of a country with a large land base and small population. Simply put, we produce far more than we could ever consume.

In absolute terms, Canada’s the world’s fifth largest exporter and the sixth largest importer of ag and agri-food products. The big players – the European Union, the U.S., Brazil and China boasting larger populations and much larger land bases available for ag production – out produce, outsell and out-import Canada.

Eliminate the size of population however in explaining the size of trade and Canada’s competitiveness on the global stage improves – a lot.

 

Bubble size = Country population

Looking at the value of agriculture and agri-food trade on a per capita basis, Canada traded (exports and imports) at about $2100 per person in 2013. The EU had trade values of about $1730 per person; the U.S., $730 per person.

These high values aren’t because we have gobs of people – we don’t – but clearly because of other factors. And productivity and innovation are at the top of the list.

Canada’s introduction of canola, now a world staple, is one example of the kind of innovation that drives leadership in global trade. We benefit from a well-educated, highly productive labour force. The median household income of $76,000 (2011), one of the highest in the world, makes for sophisticated consumers who demand high quality and fresh produce year-round. Hence, a $26.7 billion agri-food* importing industry in 2013. 

It’s a pretty cool counterpoint to those who would argue that Canada has a relatively closed ag economy.

The drivers of global trade – population is important but hardly the only factor – are complex and more related to competitiveness. So imagine a future in which China and India with their enormous populations move in the direction of our little red dot in the chart above.  Even the slightest move would translate into loads of potential.  

We’ll have more insights from our report in this blog over the weeks to come.

 

Martha Roberts, Agriculture Economics Researcher

 

*includes NAICS codes 311 and 312