Despite Canada's Growing Involvement In Global Supply Chains, Weak Links Remain

After the Canada-U.S. free trade agreement eliminated tariffs, Canadian plants became more specialized. This led to a dramatic growth in Canada-U.S. trade in parts during the 1990s. But this study found that between 2000 and 2005, Canada-U.S. parts trade stagnated; this could signal either that few gains remain to be made, or conversely, that non-tariff barriers stand in the way of business opportunities. By contrast, Canada's trade in parts with other major economies, especially developing countries such as China and Mexico, continued to grow quickly between 2000 and 2005-although the trade volumes are currently low. For example, the use of Chinese components in Canadian supply chains grew significantly. This may mean that Canadian companies are more likely to gain future efficiencies from trade in parts from countries other than the United States. http://www.newswire.ca:80/en/releases/archive/March2007/01/c5807.html

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