The recent scramble to renew NAFTA highlights Canada’s ongoing risk of being overly dependent on the US market. Even though the share of Canada’s exports to the US has declined from its peak of 85% in the early 2000s to still over 70% today, more still needs to be done to diversify Canada’s trade portfolio.
India – projected to be the world’s second largest economy by 2050 – is not even a top 10 trading partner for Canada while. Indonesia and Brazil (4 and 5 respectively) aren’t in our top 20. In addition to these, EDC identifies Chile, Panama, Hungary, Uruguay and Mexico as the top 5 markets for Canadian exporters.
Meanwhile, only 4% of Canadian SMEs export (vs. 23% for large firms). To compare to some other G7 countries: 27% of SMEs in France export, 28% in Germany, 24% in Japan, and 5% in USA. According to Stats Canada, if Canada increased its share of SMEs exporting to the same level as large firms, it would generate an estimated $225 billion in new export activity.
Services now represent 70% of Canada’s GDP. Selling Canadian financial and professional services to emerging markets by leveraging improvements in digital trade can be a key tactic to achieve trade diversification.
Check out EDC’s new ‘Markets of Opportunity’ quiz here to find the right market for your organization: https://bit.ly/2NmBbv1