Meeting the Challenges of a Global Competitive Marketplace

1. Meeting the Challenges of a Global Competitive Marketplace A Presentation by: Louis Poisson Senior Trade Commissioner Canadian Consulate General, NY To the Council of State Governments Eastern Regional Conference July, 26th,2005

2. Canada – US Trading RelationshipWhat we all know • Largest and most comprehensive in the world • Bilateral trade of US $510 Billion • $1.35 Billion daily • 37,000 trucks per day cross the border • 500,000 people per day cross the border • Bilateral Trade tripled since FTA (1989) • Growth of bilateral trade (CDA-USA) of 6% per year since NAFTA • Canada’s trade with the US is: • 52% of Canada’s GDP, 80%+ Canada’s exports, 70%+ imports • 23%+ of US exports, 17%+ of US imports

3. Canada – US Trading RelationshipWhat we know • We have the world’s largest investment relationship • The US is largest foreign investor in Canada - US $171 Billion in 2004 • Canada is 7th largest foreign investor in the US - US $124 Billion in 2004

4. Total Canadian Exports & ImportsCanada to New York, New Jersey, ConnecticutLast 5 yearsValue in Millions of Dollars Source data: Statistics Canada

5. Total Canadian Exports & ImportsCanada to DE, ME, MD, MA, NH, PA, VTLast 5 yearsValue in Millions of Dollars Source data: Statistics Canada

6. Canada – US Trading RelationshipWhat is less known • Bilateral trade in services (2003) US $46.4 billion • $US 7.6 billion surplus for the U.S.A. • Canada is number one foreign market in 39 states • Top 3 for other 8 states • Canada is largest energy supplier • 88% natural gas – supply 1/3 total demand in Northeastern U.S. • 100% electricity • 17% Oil

7. Canada – US Trading RelationshipWhat is less known • Bilateral trade in agri-food (2003) US $20 billion • Per capita consumption of US agri-food exports • Canadians: $274 • Mexicans: $ 70 • Japanese: $66 • Europeans: $17 • Canadians consumed per capita US $6,364 of US goods and services • Americans consumed per capita US $838 of Canadian products

8. Canada – US Trading RelationshipWhat is less known • 5 million US jobs • 2 million Canadian jobs • 40% of US Trade with Canada is infra-firm • 60% of US wood/paper imports • 20% of US imports used in production process or consumed • Windsor – Detroit border crossing busiest in the world

9. Canada – US Trading RelationshipChallenges • Internal issues • Softwood lumber • BSE • COOL • Bio-Terrorism Act • Drug re-importation • External Challenges • The Asian challenges • Outsourcing • Textile Quotas • Security • S&T lead • Global supply chain

10. Canada – US Trading RelationshipTrade impacts – select internal issues • Softwood Lumber • 27% duty passed on to US consumers. Inflated housing costs US $6,000 1 • US housing market needs 1/3 supply from stable external source • 25 US jobs in lumber-consuming industry vs. 1 US job in lumber producing • Affects some 7 million American workers • B.S.E. • Cost US $4.7 billion to US beef industry 2 • US exports packing jobs in Canada • US beef exports down 82% below 2003 levels • Link with US beef ban in key export markets _____________________________________ 1. National Association of home builders 2. Kansas Department of Agriculture

11. Canada – US Trading RelationshipTrade impacts – select internal issues • Country of Origin Labelling • Cost to consumers US $3.9 billion 1 • Segregation, sourcing complexities • Not linked to food safety-exclusions • Bio-Terrorism Act • Necessary • Enhanced bilateral cooperation • Direct impact on US $20 billion agri-food trade • Increased costs to producers • Increased risks vs. commitments for delivery _____________________________________ 1.US Department of Agriculture

12. Canada – US Trading RelationshipPartnering to meet external challenges • Asian Challenge • Canada lost 1st place to China in residential furniture • Facilitate dialogue between associations • Encourage business partnerships • Market proximity/after sales servicing • Develop niche markets • Demand for smaller volumes • Blending high-end and import product lines

13. Canada – US Trading RelationshipPartnering to meet external challenges • Outsourcing • Bilateral trade in services: US $46.4 billion • US $7.6 billion US surplus • Total investments: US $295 billion • 7 million jobs • US trade with Canada is 40% intra-firm • $1 outsourced generates $1.14 in benefits to US economy1 • .58 in cost savings, new exports, profits repatriation • .46 in value of labour redeployment ____________________________ 1. McKinsey Global Institute: 2003

14. Canada – US Trading RelationshipPartnering to meet external challenges • Science & Technology • Mar 05 Technology Transfer Roundtable • Focus – Biotech/Stem Cell, Fuel Cell, Nanotech • Mar 05 Stem Cell Research Roundtable in NJ • Ongoing dialogue • Identification of areas of interest • Aug 05 New Technology Partnership Position • Sep 05 Basic research leading to Canada-NJ partnership development in Stem Cell research • Nov 05 Stem Cell Research Mission • Brain Repair Center in Halifax • Canadian Nanotech Alliance in Edmonton

15. Canada – US Trading RelationshipPartnering to meet external challenges • SECURITY • Sep 05 Reinforced Canadian Presence at New York Maritime Security Expo • Fall 05 Research on Homeland Security Market • NY, CT, NJ, PA • Opportunities for Partnership • Spring 06 Briefings/Outreach in Canada • Fall 06 Incoming Technology Partnership Missions

16. Contact: Senior Trade Commissioner: Louis Poisson Canadian Consulate General, NY 1251 Ave. of the Americas Tel: 212-596-1670 Fax: 212-596-1793 Email: louis.poisson@international.gc.ca