Switching dependence from U.S. export markets no easy task
In the wake of the new trade agreement with the United States and Mexico, some observers say Canada needs to shift exports away from the southern neighbours. That shift of trade would reduce dependence on United States’ goodwill to accept Canadian products.
In landlocked Saskatchewan, our easiest export markets to penetrate have been the United States; being next door reduces freight costs and makes for a natural customer.
That natural customer relationship has always been a source of wealth for Sas- katchewan and Canada — until the Trump take-no-prisoners style trade talks. Saskatchewan’s total exports in 2017 amounted to $28.9 billion according to the Saskatchewan Trade Export Partnership.
Out of that 55.5 per cent - just over $16 billion - was shipped to customers in the United States. Our provincial exports to the U.S. increased by a whopping 25.8 per cent last year.
Our next largest market, China, took just over 12 per cent of exports with the number three market, India, taking four per cent.
In number five was Japan, taking 3.5 per cent while Mexico took 2.7 per cent. Countries outside of the top 10 export markets took 13.6 per cent of our exports. Weaning Saskatchewan business from the USA market will be a long process, requiring the development of new trade channels and new business relationships.
Developing different trade patterns will require intense effort and promotion. About 56 per cent of Saskatchewan exports are oil, canola, potash and wheat. Twenty-five per cent of our exports are oil and oil products. Without pipeline access to other markets Saskatchewan oil producers have little choice but to ship south. Our second largest export, canola and canola products, accounts for 19 per cent of provincial exports. Canola competes with U.S.A. growers.
In the same vein, our potash at 16 per cent of exports is seen by Trump as a barrier to development of low-grade deposits in his country. And our wheat at six per cent of exports competes directly with U.S. wheat.
Saskatchewan faces a brick wall in the attempt to diversify export markets. Our natural market next door has lost usual access. Other markets are distant and will need cultivation to grow, given global competition.
And this province has diversified exports more than the rest of Canada. The country ships 73 per cent of exports to the United States compared with 55 per cent in Saskatchewan.
Ron Walter can be reached at ron[email protected] sasktel.net