An independent think tank dedicated to economic progress in Atlantic Canada.

Competing in the Global Economy: Atlantic Canada's Recent Export Performance and Trade Policy Issues

May 2, 2007

Global trade continues to grow rapidly, expanding in the 1990s at about 6.5% per year, twice as fast as world output growth. This ongoing globalization has been spurred by trade and market liberalization, reductions in transportation and communication costs, and the development of new information and communication technologies. These forces have increased global competition and allowed businesses to increasingly specialize and globally source their productive capacity. 
 
In conjunction with these developments, the distribution of global economic activity is shifting with the emergence of large, rapidly growing economies, most notably China and India. These countries offer large new markets and are providing formidable competition in manufacturing and tradable services, with North American companies shifting productive capacity to Asia to take advantage of lower production costs. Trade patterns within Asia and between Asia and North America increasingly reflect these shifts in global supply chain management.  
 
These global developments are having an impact on the Atlantic provinces. Specifically, this includes an acceleration in Atlantic Canada’s international trade beginning in 1990, most notably in trade with the United States, and a boost since 1999 from rapidly growing energy exports. The region’s exports to China have increased rapidly over the last decade, taking advantage of China’s voracious appetite for raw materials and other inputs for its manufacturing sector. Other Atlantic firms are pursing trade with China in areas such as environmental and engineering consultancy, advanced technologies and medical diagnostics.
 
However, Atlantic exporters are also facing a number of headwinds. The significant appreciation of the Canadian dollar since 2003, when combined with higher energy costs, is having visible impacts on the region’s manufacturing sector and tourism industry. Some industries are facing acute challenges, such as the steady decline in demand for newsprint as advertisers shift from printed copy to the Internet. In addition, competitive pressures are intensifying across the board as Atlantic firms face up to increasing global competition and pressures from low cost producers in both goods and services. Heightened security concerns are also having an impact on compliance costs and border delays for firms selling goods in the region’s prime export market, the United States.
 
It is therefore an appropriate time to take stock of these developments and assess their implications for future trade patterns and trade policy in the Atlantic region. This report reviews and analyses Atlantic Canada’s export performance since the early 1990s, but with a focus on developments since 2000. The report highlights the region’s export growth sectors, industries that are facing significant challenges, developments in Atlantic service exports and potential new markets. It also identifies the key policy issues that need to be considered to help Atlantic Canada maintain and improve its competitive position in the global economy. 

Publication Files

May 2, 2007

Competing in the Global Economy: Atlantic Canada's Recent Export Performance and Trade Policy Issues

 

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