Archive for the ‘Canada’s Exports’ Category

Tuesday, November 2nd, 2010

The following is excerpted from the 2 November 2010 edition of “ca.reuters.com”.

Canada’s dollar hit its highest in more than two weeks against the U.S. currency on Tuesday, putting its sights on parity again, helped by an unexpected interest rate rise in Australia.

But the gains paled in comparison to its commodity cousin, the Australian dollar, which shot above parity to its highest against the U.S. currency since 1983 after a surprise Australian interest rate hike.

At 8:30 a.m. (1230 GMT), the Canadian dollar was at its highest since October 15 at C$1.0081 to the U.S. dollar, or 99.20 U.S. cents, up from C$1.0161 to the U.S. dollar, or 98.42 U.S. cents, at Monday’s close.

Canada’s currency pushed above parity last month but had no staying power, partly because the Bank of Canada’s last policy statement was more dovish than some had expected.

“We’re just a penny shy of parity once again. What’s going to push us over? There’s no shortage of event risks and developments over the next few days that could,” said Eric Lascelles, chief Canada macro strategist, at TD Securities.

This week’s events pose strong potential for market swings as investors will absorb policy decisions from a host of central banks, particularly the U.S. Federal Reserve, which is expected to launch another round of quantitative easing through bond purchases. U.S. midterm elections on Tuesday and U.S. and Canadian monthly jobs data, due Friday, are also key.

In addition, investors will also be keeping an eye on developments in Anglo-Australian miner BHP Billiton’s $39 billion hostile bid to buy Potash Corp., a fertilizer giant and one of Canada’s biggest companies. A successful deal could nudge the Canadian dollar higher as many Canadian shareholders convert their U.S. dollar payouts back to the domestic currency.

Lascelles said parity was a “magical” figure but that TD was not expecting it right away and one key factor may be the details of the Fed’s quantitative easing program.

Markets are generally priced for the U.S. central bank to commit to buying at least $500 billion in Treasury debt over the coming months in a new round of stimulus aimed at shoring up the U.S. economy.

“We’re formally forecasting at least as an opening position more like $300 billion over the first few months. I’m inclined to think that the market could be a little bit disappointed tomorrow with the consequence that the U.S. dollar strengthens and the Canadian dollar doesn’t quite pull off parity. It should be a whippy market,” said Lascelles.

Canadian government bonds were slightly lower, taking a wait-and-see approach similar to U.S. Treasuries as the two-day Fed meeting was to start on Tuesday.

The two-year bond fell 4 Canadian cents to yield 1.431 percent, while the 10-year bond shed 10 Canadian cents to yield 2.851 percent.

Monday, November 1st, 2010

The following is excerpted from the 29 October 2010 edition of “ca.reuters.com”.

Canada’s economic recovery picked up speed again in August after stalling in July, but third-quarter growth is still on track to be the weakest since the rebound began, according to figures released on Friday.

Statistics Canada said gross domestic product climbed 0.3 percent in August, bolstered by wholesale trade, manufacturing and oil and gas extraction. GDP shrank 0.1 percent in July, the first contraction in a year.

The August figure matched the forecasts from a Reuters poll, and supported market expectations that the Bank of Canada will keep its key interest rate on hold through early 2011 after three successive hikes earlier this year.

Canadian Finance Minister Jim Flaherty welcomed the August comeback, but said U.S. housing woes remain a threat, and economists also blamed a weak U.S. economy for the slowdown…

Canada ships three-quarters of its exports to the United States and its autos and timber industries are particularly vulnerable to swings in demand from the next-door giant.

U.S. growth rose an annualized 2 percent in the third quarter, not enough to chip away at high unemployment or change perceptions of more monetary easing from the Federal Reserve next week, U.S. data showed.

The International Monetary Fund had warned on Thursday that risks to Canada’s economic outlook have increased and include housing market weakness in the United States.

It said the government and Bank of Canada should be ready to prime the economic pump if needed, but agreed that current plans to wind down the stimulus program were appropriate now.

The Bank of Canada focuses on inflation rather than growth to set its monetary policy, and there was mixed news on that front on Friday.

Statscan said high demand for precious metals offset the dampening effect of a strong Canadian dollar on motor vehicle exports to lift producer prices in September by 0.2 percent.

But raw materials prices unexpectedly fell 0.4 percent in the month, dragged down by lower crude oil prices.

The Canadian dollar firmed to a session high of C$1.0170 to the U.S. dollar, or 98.33 U.S. cents after the date. It later retreated somewhat, but stayed above Thursday’s close of C$1.0215 to the U.S. dollar, or 97.90 U.S. cents.

The Bank of Canada last week cut its third-quarter projection to an annualized 1.6 percent, from 2.8 percent and economists say that even that may be optimistic…

The central bank hiked rates to 1 percent from June-September before pausing in October. Canada’s primary securities dealers unanimously predict the bank will hold rates unchanged at its next decision on December 7.

Monday, October 25th, 2010

The following is excerpted from the 15 October 2010 news release by Agriculture and Agri-Food Canada.

Agriculture Minister Gerry Ritz is in Japan at the first-ever Asia-Pacific Economic Cooperation (APEC) Agricultural Meeting working to strengthen trade relationships, expand market opportunities for farmers and create a more prosperous Canada.

“Recognizing the need for a safe and dependable food supply as the world population grows, we’re at APEC to drive a science-based approach to trade,” said Minister Ritz. “By promoting innovation, like biotechnology, Canada is looking forward to a future with stronger trade partnerships, a more sustainable environment and more profitable farmers, making sure that families around the world continue to have access to top quality food.”

Minister Ritz is taking full advantage of APEC by holding bilateral meetings with agriculture leaders from China, Mexico, and South Korea. Minister Ritz, together with provincial representatives from Canada’s New West Partnership, met with his Japanese counterpart Michihiko Kano and raised Canada’s long-standing request for greater access for Canadian beef. They also sat down with Japanese industry to discuss how to better help get Canadian products in the hands of Japanese consumers.

“We’re working at every level — provincial, federal and industry — to make sure countries like Japan and South Korea trade based on sound science and that our hard working beef producers achieve the full market access they deserve,” said Minister Ritz…

In advance of APEC, Minister Ritz led a trade mission to Indonesia and received assurance from Agriculture Minister Suswono that Canada’s world-class system — which ensures that various plants such as wheat and potatoes destined for food are safe — will be fully recognized. This achievement is good news for farmers as it removes additional, costly and unnecessary testing at Indonesian ports. The Canadian Wheat Board anticipates that Canada’s wheat exports to Indonesia will be valued at more than $300 million this year.

Canada and Indonesia also signed an agreement to improve agriculture cooperation and focus on removing trade barriers to various Canadian products including seed potatoes, goat and sheep livestock and genetics, and cherries. Indonesia will enlist Canada’s animal health expertise to help build testing capacity in order to maintain a healthy cattle sector…

Minister Ritz also made a stopover in Hong Kong to follow up Canada’s recovery of full market access for Canadian beef last December. Minister Ritz met with industry and was pleased to report that Canada’s beef exports to Hong Kong have significantly exceeded expectations. The Canadian Beef Export Federation originally expected the market to grow to $65 million but it is now expected to be worth more than $105 million for Canadian producers in 2010, a growth of 67 per cent since full market access was achieved.

This agriculture trade mission is part of Minister Ritz’s overall strategy to work with industry to strengthen Canada’s market share around the world, making sure that Canadian farmers can make their money from the marketplace and continue to drive Canada’s economy.

Tuesday, October 19th, 2010

The following is from the 19 October 2010 edition of “montrealgazette.com”.

The small business sector’s reluctance to pursue international trade is hurting the economy, and could have cost 300,000 jobs in missed opportunities and positions in the past decade, says CIBC World Markets.

The number of small-and medium-sized businesses involved in export activity has fallen to nine per cent from 10.7 per cent since 2000, despite the growth in globalization, the report says.

“This low level of internationalization carries a significant … economic cost given the importance of emerging markets to the global economic recovery,” said CIBC deputy chief economist Benjamin Tal.

As Bank of Canada governor Mark Carney warned in a recent speech, Canadian companies now face an American economy expected to show slow growth over the next decade, along with the increased risk of U.S. protectionism.

Tal concurs, saying “the traditional engines of growth during recoveries (housing and consumer) will not be able to fulfil their usual role.”

But opportunity exists for Canadian firms in the reorganization of production at the international level, through outsourcing and the development of global value chains, he said.

“Increased U.S. exports to emerging markets means increased options for Canadian SMEs (small-and medium-sized businesses) to participate in the supply chain momentum that this trend generates,” adds Tal.

“Currently close to 30 per cent of Canada’s trade is being sold as inputs into global supply chains. The changing engine of growth south of the border can provide SMEs with a golden opportunity to become a larger player in this expanding space.”

SMEs currently generate one third of the total value of Canadian exports with an average value of $4.6 million per firm, Tal said.

Thursday, May 6th, 2010

The following is excerpted from the 27 April 2010 edition of “globeandmail.com”.

Canadian companies can develop new export opportunities to Colombia – and steal market share from the United States – once a new free trade agreement is ratified with the South American nation, Colombian Trade Minister Luis Plata says.

While talks toward a U.S.-Colombia free-trade agreement have stalled, Canada appears on track to pass a trade deal with Colombia in coming weeks, eliminating tariffs on products that are still subject to trade barriers with the U.S….

[Plata] said it would be logical for Colombians to shift more purchases of agricultural products like wheat, corn and barley from the U.S. to Canada if they can be imported more cheaply. Colombian products heading to Canada, which often arrive by way of a U.S. importer, could begin flowing directly, he said.

And Mr. Plata said other new business opportunities will inevitably emerge with a country of 45 million people once a deal is in place, suggesting, for example, that Colombia could begin exporting biofuels to countries like Canada. Trade between the two countries totalled about $1.3-billion last year, accounting for less than 1 per cent of Canada’s trade….

The biggest challenge, however, remains Colombia’s reputation for violence, illegal drugs and a long-running rebel insurgency – a reputation Mr. Plata said is out of date.

Since the government of President Alvaro Uribe took office in 2002 and launched a “tremendous effort” to reform policing and the judiciary, Mr. Plata said the country’s murder and kidnapping rates are down 50 per cent and 85 per cent respectively since 2002, and that a history of violence against union organizers is also being curbed.

Colombia, he said, is now launching a rebranding campaign to alert the world to its improving legal and human rights record.

“I’ll never deny we have difficulties and challenges, but right now the reality in Colombia is far better than it was seven years ago, and it’s far better than the image that we have,” Mr. Plata said.

… The Liberals have already agreed to support the deal after winning a concession that both countries will conduct an annual review of their respective progress on human rights violations. Mr. Plata said each government will do its own human rights assessments under the proposed compromise. Colombia’s will be done by his trade ministry, he said.

Colombia is now pursuing free-trade deals with 49 countries as part of a pro-business stance that has opened the country for trade since 2002. Canadian companies have directly invested over $4-billion in Colombia in the past five years, especially in the mining sector….

Wednesday, April 28th, 2010

The following is excerpted from today’s edition of the “Canadian Press”.

It may well be the biggest and most important trade negotiation that most Canadians have never heard of.

While most of the news out of Europe of late has had to do with the Greek debt crisis and an ash-spewing volcano in Iceland, about 60 Canadian officials have been huddled in contentious trade talks with their European counterparts – at least video images of their counterparts – in what used to be Ottawa’s city hall by the Rideau.

There have been no demonstrators in front of the building denouncing a sell-off of Canadian sovereignty, and hardly a mention in the media or the House of Commons.

But if you listen to the critics, what is at stake is in some ways more troubling than the Canada-U.S. free trade talks of the late 1980s – over which an election was fought – or the NAFTA deal that followed.

“What we want is the most ambitious trade agreement we’ve ever had,” federal Trade Minister Peter van Loan said in an interview with The Canadian Press.

“We’re looking for something that is deeper and broader than even NAFTA, and this is with the world’s largest economy.”

The two sides are now in the third round of talks, with two more planned. If all goes well, Van Loan hopes to see ink on the Comprehensive Economic and Trade Agreement or CETA by late next year….

The talks involve practically everything it is possible for the two sides to place on the table – not just the usual stuff of tariffs and duties, but services, investment, agricultural subsidies, government procurement at the national and subnational levels, intellectual property, regulatory rules and labour mobility.

Given the size of the European Union market – 27 countries, 500 million people and $19 trillion in gross national product – Canada has been eager to get a deal done for years. The Europeans, not so much.

And that’s the problem, according to critics, who say Canada has appeared too eager in dealing with a savvy economic superpower.

“The Europeans could walk away without any negative political repercussions, whereas for our government, it has become a centrepiece of their foreign policy,” said Scott Sinclair, a researcher for the Canadian Centre for Policy Alternatives, who recently wrote a report on the negotiations.
Sinclair says the talks are not so much about freeing up trade, noting that tariffs on the more heavily traded items are already under three per cent, but about weakening the ability of governments on both sides of the Atlantic to regulate how multinationals operate.

The Europeans, he says, want to do away with Canada’s supply management system in dairy and poultry, along with the Wheat Board and the ability of provincial and municipal governments to favour local supplier in their procurements. One big prize Europe covets is Ontario’s green technology initiative, he says.

In return, he believes, Canada would get to send more raw materials to Europe.

Not so, says former Liberal finance minister John Manley, who now heads the Canadian Council of Chief Executives, the country’s most influential business lobby group.

Manley argues that with the U.S. economic star fading, Canada needs to diversity its trade and Europe, a prosperous and in many ways similar economy to Canada’s, would bring major benefits.

Tuesday, May 5th, 2009

On April 30, 2009, the Government of Canada concluded the regulatory process to amend the Export Control List. This regulation brings into effect the 2007 version of the Government of Canada’s “A Guide to Export Controls”. This regulation includes a number of additions, deletions, and clarifications to the controls relating to the exportation of various goods and technologies.

A brief overview of the key changes to the items affected by this amendment is available at: http://www.international.gc.ca/controls-controles/about-a_propos/expor/guide.aspx.

An electronic version of “A Guide to Canada’s Export Controls – 2007″ is available at: http://www.international.gc.ca/controls-controles/assets/pdfs/documents/exportcontrols2007-en.pdf.

A copy of the regulation and the Regulatory Impact Analysis Statement will be published on the Canada Gazette website after May 13, 2009.

Please contact the Export Controls Division at (613) 996-2387 for further clarification.