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The Unseen Wall: The Fraser Institute's 2003 Trade Survey

Type: Research Studies
Date Published: December 1, 2003
Authors:
Research Topics:
Trade

Over the past two years. The Fraser Institute has surveyed Canadian companies about the incidence of non-tariff and non-quota trade barriers that companies operating in Canada face when exporting goods and services to the United States. For this study, we classified informal trade barriers under three headings:

  1. discriminatory regulations and policies on health, product packaging, and environmental conservation.
  2. cumbersome customs clearance and inspection procedures; and
  3. policies on domestic content requirements, particularly "buy national" policies.

A series of spats over the last year between Canada and the United States combined with ugly comments about the United States from high-profile Canadians raised questions about whether these developments would have a negative impact on Canada's access to the US market.

"Yes," is the overwhelming response of those on the front lines of Canada's trade with the United States. More than nine of 10 of the Canadian exporters who responded to the survey said relations between Canada and the United States have deteriorated over the last year and two-thirds of those respondents said it had damaged their ability to export to the United States.

This could develop into a serious economic problem for Canada. A third of everything produced in Canada is exported to the United States. Canada's US trade surplus alone is equal to almost 10% of Canada's economy. In this age of just-in-time delivery and integrated plants on both sides of the border, it would only take a change in border regulations to throw tens of thousands of Canadians out of work.

Many believe Canada-US relations have improved in recent months but this survey shows how quickly relations can deteriorate and how that can have a negative effect on Canadian trade, at least in the eyes of those actually exporting into the United States.

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