NAFTA talks hurt ex­ports: EDC poll

The Niagara Falls Review - - Business -

OT­TAWA — A grow­ing num­ber of Cana­dian ex­porters were say­ing the NAFTA talks were hav­ing a neg­a­tive im­pact on their op­er­a­tions even be­fore the trade dis­pute with the United States es­ca­lated in re­cent weeks.

A sur­vey for Ex­port Devel­op­ment Canada (EDC) found 28 per cent of the 1,000 ex­porters polled said the NAFTA talks had a neg­a­tive im­pact on their Cana­dian op­er­a­tions.

That was up from 23 per cent in an ear­lier sur­vey.

“Cur­rent sales may be rid­ing high, but trade un­cer­tainty is hav­ing an im­pact,” EDC chief econ­o­mist Peter Hall said in a state­ment Fri­day.

“Nearly one in five ex­porters say that NAFTA talks have neg­a­tively af­fected their in­vest­ment plans. This re­luc­tance to in­vest could se­verely re­strain Canada’s ex­port ca­pac­ity in the years ahead.”

The sur­vey was done from April 18 to May 11, be­fore the United States ended an ex­emp­tion for Canada on the global steel and alu­minum tar­iffs it had put in place in March.

Since the tar­iffs went into place on Cana­dian metal ex­ports at the end of May, Canada has im­posed re­tal­ia­tory tar­iffs on steel and alu­minum com­ing from the U.S., as well as a wide range of con­sumer goods, while the U.S. has threat­ened ad­di­tional tar­iffs on the auto sec­tor.

The bi-an­nual sur­vey found over­all trade con­fi­dence in­creased to 76.5 per cent from 73.5 per cent in the pre­vi­ous ques­tion­naire, which was done at the end of last year.

The in­crease came as 73 per cent of Cana­dian com­pa­nies in­di­cated their ex­port sales will in­crease over the next six months com­pared to 56 per cent in the pre­vi­ous sur­vey.

More busi­nesses said their sales to the U.S. in­creased over the past six months with 46 per cent re­port­ing an in­crease com­pared with 36 per cent.

The EDC sur­vey also noted that ris­ing in­ter­est rates were hav­ing a neg­a­tive im­pact on the sales of a larger share of ex­porters at 30 per cent com­pared with 21 per cent in the pre­vi­ous sur­vey.

The Bank of Canada raised its key in­ter­est rate tar­get to 1.5 per cent this week, prompt­ing Canada’s big banks to raise their prime lend­ing rates.

In rais­ing the rate, the cen­tral bank said that de­spite the trade dis­pute it still projects Cana­dian growth to av­er­age just slightly above its po­ten­tial with in­fla­tion al­ready on tar­get.

It ex­pects the down­side of the trade poli­cies to be largely off­set by higher oil prices and the stronger U.S. econ­omy.

STEVE HELBER THE AS­SO­CI­ATED PRESS

Canada has im­posed re­tal­ia­tory tar­iffs on steel and alu­minum com­ing from the U.S., as well as a wide range of con­sumer goods.

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