Canada targets expansion of Overseas Exports by 50% by 2025 with SME’s presenting the greatest growth opportunity.
Global Affairs Canada’s Office of the Chief Economist has released the 20th edition of its flagship report, Canada’s State of Trade 2019. The report highlights in 2018, Canadian exports and imports of goods and services totalled $1.5 trillion, placing the share of trade in the economy at 66% of GDP.
Canada’s exports of goods and services to the world increased 6.2%, or $41 billion, to reach $706 billion, while imports rose 5.4%, or $39 billion, to $753 billion.
By destination, goods exports to the United States increased 5.4% to $433 billion in 2018. However, exports to non-U.S. destinations achieved even faster growth as Canada continues to diversify exports away from a reliance on the United States. Among Canada’s major non-U.S. trading partners, exports to China recorded the fastest growth (+16%), followed by South Korea (+9.7%) and Japan (+9.1%). Goods exports to the European Union rose modestly (+5.9%).
Regionally, imports from the United States were up 5.4% to $391 billion in 2018, while imports from non-U.S. sources reportedly grew by 6.5%. Among Canada’s major non-U.S. trading partners, imports from India recorded the fastest growth at 30% in 2018, followed by imports from South Korea (+12%) and the EU (+12%).
Trade Diversification & SME Opportunity
The geographic concentration of Canadian exports to the United States is prompting the Canadian government to further diversify its trade markets and allow Canadian businesses to access opportunities in fast growing markets. The study also identifies Canada’s SME’s as representing a significant untapped trade opportunity. Despite their importance to the domestic market, SMEs in Canada have little participation in exporting.
Against this backdrop Canada has set itself an ambitious trade expansion goal, targeting growth of overseas exports by 50% by 2025. The report points to five key strategies to achieving this goal:
- Lowering trade barriers through FTA’s (free trade agreements)
- Get in early on fast growing markets, particularly emerging markets and developing economies
- Diversify through US with most exporters moving into new markets after exporting to the U.S. first
- Digital Trade and growth of ICT (information and communication technology) enabled services
- Facilitate SME’s to reach new markets. SME’s currently represent more than 90% of employer businesses but only 12% of exports
Working with multinationals & SME’s in diverse sectors, TradeLink have observed the focus of leadership teams has shifted to taking advantage of opportunities in new and expanding markets, most notably Japan, Europe (UK, Germany, France, Netherlands) Central and Eastern Europe, Australia and South Africa. In tandem, TradeLink International has focused on building capacity and capability in these regions helping our clients to enter and scale in new markets quickly. With an extensive partner network and on the ground specialist teams, we support our clients’ logistics challenges of managing a diverse ecosystem of suppliers and trading partners.
The role of Digital
As multinationals scramble to cope with an unknown trade landscape, clients are turning to digital platforms to facilitate better data-driven decision making and end-to-end supply chain visibility.
New technologies can be seen to facilitate trade and shortening supply chains through more efficient: route planning, real-time supply chain visibility and optimised storage and distribution networks. Digital is also making it easier than ever before to cross borders and where exporters/importers can use Electronic Data Interchange to file documents electronically, further reducing time and cost. Digital enabled solutions are helping clients transform business processes and operations and proving the largest area of investment.
The role of TradeLink
TradeLink delivers proactive solutions, combining data and analytics with robust supply chain planning and execution processes, providing actionable insights for client’s strategic business planning, forecasting and proactive risk management. Customer benefits include:
- End-to-end supply chain management
- Shorter delivery times and increased availability of products,
- High-frequency multi-modal transports services (Sea, Air, Road and Rail)
- Just-in-time (JIT) fulfilment logistics and value-added services
- Real-time monitoring and control
- Control tower solutions with single point of contact customer support
- Track and Trace ™ shipment tracking
If you would like to learn more about our Global services at TradeLink or would like to discuss how we can assist you – Contact us