Switch­ing de­pen­dence from U.S. ex­port mar­kets no easy task

Moose Jaw Express.com - - News - By Ron Wal­ter - For Agri-Mart Ex­press

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

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