U.S. – Canada Trade: Opportunities Through NAFTA and Beyond

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U.S. – Canada Trade: Opportunities Through NAFTA and Beyond. Andrew I. Rudman Office of NAFTA & Inter-American Affairs International Trade Administration U.S. DEPARTMENT OF COMMERCE Northern Networks Trade Conference Duluth, MN October 18, 2006. TOP 10 U.S. TRADING PARTNERS 2005. - PowerPoint PPT Presentation

Text of U.S. – Canada Trade: Opportunities Through NAFTA and Beyond

  • U.S. Canada Trade: Opportunities Through NAFTA and Beyond

    Andrew I. Rudman Office of NAFTA & Inter-American Affairs International Trade Administration U.S. DEPARTMENT OF COMMERCE Northern Networks Trade ConferenceDuluth, MN October 18, 2006

  • TOP 10 U.S. TRADING PARTNERS2005Source: U.S. Bureau of Census

  • U.S. EXPORTS TO NORTH AMERICA EXCEEDING THOSE TO OTHER REGIONS 2005Source: U.S. Bureau of CensusNAFTA 36.7%

  • U.S. TRADE IN PERSPECTIVE2005Source: U.S. Bureau of Census

  • U.S. NAFTA TOTAL TRADE1990-2005Source: U.S. Census Bureau

  • Most comprehensive Regional Trade Agreement signed by the United StatesExports to NAFTA are outpacing rest of worldNAFTA trade has increased by over $496 billion since 1993 to $789.5 billion in 2005Combined trade is $2.2 billion a day between NAFTA partners, thats $1.5 million a minuteU.S. two-way merchandise trade with Canada and Mexico more than exceeds U.S. two-way merchandise trade with the European Union (25) and Japan combined U.S. exports to Mexico are greater than U.S. exports to Mercosur and the Andean region combined.

    NAFTA TRADE IN PERSPECTIVE

  • U.S. CANADA TRADESource: U.S. Bureau of Census

  • CANADA & TRADESHARE OF CANADIAN IMPORTS2005SHARE OF CANADIAN EXPORTS2005Source: World Trade Atlas

  • CANADA & ENERGY In 2005, Canada had a reported 178.8 billion barrels of proven oil reserves, second only to Saudi Arabia. However, the bulk of these reserves (over 95%) are oil sands deposits in Alberta. Nevertheless, during January-November 2005, the top supplier in the world of crude oil to the United States was Canada (1.6 million bbl/d). More than 80 percent of U.S. natural gas imports come from Canada, mainly from the western provinces of Alberta, British Columbia, and Saskatchewan.Canada enjoys a vigorous electricity trade with the U.S., and the electricity networks of the two countries are heavily integrated.Source: U.S. Department of Energy

  • NAFTA SUCCESSES

    LEVELED THE PLAYING FIELDCANADA: Duty-free in 1998MEXICO: Virtually duty-free; average Mexican tariff has fallen from 10% to 2% all tariffs to be eliminated by 2008

    STIMULATED TRADE GROWTHU.S. exports to NAFTA partners have grown by 133%For Canada up 110%for Mexico up 188%

  • MINNESOTA & TRADE

  • MINNESOTA & TRADE

    NAFTA: Exports from Minnesota to Canada & Mexico reached $4.1 billion in 2005, an increase of 101% since 1993 when exports were $2.1 billion.NAFTA: Over 28% of Minnesotas exports go to the NAFTA region. CANADA: Canada is Minnesotas #1 export market 24.4 percent of its exports go to Canada. In 2005 it exported $3.6 billion.CAFTA-DR: Exports from Minnesota reached $81.4 million in 2005. U.S. Peru TPA: Exports from Minnesota reached $19.8 million in 2005.U.S.-Colombia TPA: Exports from Minnesota reached $38.9 million.

  • SHARE OF MINNESOTAS MERCHANDISE EXPORTS , 200528 PERCENT WENT TO NAFTASource: U.S. Bureau of Census

  • The SPP- What Is It?The Goal: ensure North America- Best and safest place to live, work and do business Maintains NORTH AMERICAN ADVANTAGE in era of global sourcing

    Builds on the NAFTA, P4P, and border initiatives to:Better protect citizens from man-made and natural threats Promote safe and efficient movement of people and goods

    The SPP consists of an economic and a security component

    Based on the principle that our common prosperity depends on our mutual security

    Expands economic opportunities by reducing barriers and making our businesses more competitive in the global marketplace

  • The SPP- What Is It?The SPP is meant to:

    Cut red tape, lower costs for manufacturers by eliminating unnecessary barriers

    Enhance our mutual efforts to:improve our quality of life, protect our environment, improve food safety and consumer choice, combat infectious diseases, and develop responses to cross-border man-made/natural disasters

  • Economic (Prosperity) Component Working Groups Manufactured Goods (DOC) Lower production costs for North American manufacturers by eliminating unnecessary regulatory barriers, ensuring compatibility of regulations and by eliminating redundant testing requirements Provide consumers with cheaper, safer, and more diversified and innovative products

    The Other Nine:E-Commerce and ICT (DOC)Energy (DOE)Movement of Goods (USTR)Transportation (DOT)Food and Agriculture (USDA)Business Facilitation (DOS)Financial Services (Treas.)Environment (DOS)Health (HHS)

  • Security Component Working Groups(DHS)Secure North America from External Threats Traveler and Cargo Security, and Bio-protection

    Prevent and Respond to Threats within North AmericaAviation and maritime security, law enforcement, intelligence cooperation, and protection, prevention and response

    Further Streamline the Secure Movement of Low-Risk Traffic across our Shared BordersDevelop and implement strategies to combat threats, such as terrorism, organized crime, migrant smuggling and trafficking

  • Some Accomplishments to DateUniform in-advance electronic exchange of cargo manifest data (maritime, railroad and motor carriers)50% Reduction of Detroit/Windsor waitsConsumer Product Safety AgreementsFood Safety Coordinating Task ForceHarmonizing risk assessment mechanisms, and establishing protocols to detect fraud and smuggling Ongoing R.O.O. liberalization- $30 bln in goods affectedNASTC Strategy (steel)US-Canada PulseNet MOUCreation of avian/pandemic influenza coordinating bodyMexico adoption of low-sulfur fuel standard

  • 2006 InitiativesFive SPP Cancun priorities:Smart, secure bordersEnergy securityEmergency managementAvian and Pandemic InfluenzaNorth American Competitiveness Council

  • North American Competitiveness Council(NACC)Membership- 10 private sector representatives from each country

    U.S. Secretariat- Council of the Americas and U.S. Chamber of Commerce

    Organization varies in each country

    Purpose: provide recommendations on N. American competitiveness that could be addressed through the SPP

    Value of high-level private sector input

    Recommendations AND solutions to SPP Ministers

  • Next StepsNACC priorities to Ministers

    SPP Ministers Meeting early 2007

    Working groups to continue existing projects and identify new deliverables

  • Highly developed transportation infrastructureSophisticated telecommunications infrastructure integrated with the U.S.Stable, mature financial marketsNo restrictions on the movement of funds into or out of the countryEfficient Marketing Channels Common language Culture Canadians are very familiar with U.S. products and services Geographic proximity Congruent time zone High standard of living Supportive Government Roaring Canadian Dollar US$ 1.00 = C$ 1.1357Why Canada First?

  • Understanding CanadaYour key to making a loonie or a toonie north of the border Realize the significance of the U.S.-Canada trading relationship In 2005, two-way trade amounted to US $479 billion - up 12% from 2004 and is larger than the sum of 15 European Union countries Look at regional differences in Canada Canada and the U.S. are similar in many ways, but understanding what makes Canada different and unique is important for U.S. exporters Look to the U.S. Commercial Service for assistance in understanding the Canadian market and selling your products or services in Canada

  • 80% of Canadas Population

  • Culture

    Metric system

    Labeling

    TaxesA relatively small and dispersed Canadian population Understanding the Differences

  • Best Prospects for U.S. Exports to Canada (2006)SectorAutomotive Parts & Services (APS)Electronic Power Systems (EPS)Building Products (BLD)Plastic Materials/Resins (PMR)Oil/Gas Field Machinery (OGM)Computers/Peripherals (CPT)Computer Software (CSF)Telecommunications Equipment (TEL)Medical Equipment (MED)Agricultural Machinery and Equipment (AGM)Water Resources Equipment/Services (WRE)Security/Safety Equipment (SEC)Sporting Goods/ Recreational Equipment (SPT)

  • Canadian Market Entry StrategiesAPPOINT AGENTAPPOINT DISTRIBUTORFORM STRATEGIC ALLIANCESESTABLISH BRANCH OFFICE IN CANADA

  • ITA Can Help

  • Commercial Service Canada Products and Services Gold Key Service Market Research International Partner Search Single Company Promotion (SCP) Platinum Key Service Trade Missions, DealMakers Business Service Provider (BSP)

  • Upcoming Trade Schedule Trade Events scheduled from 2006 2008 include: Industrial/Maritime Security Event Canadian Solid Waste & Recycling Expo Meet the Buyers Seminar Plastics Executive Service Trade Mission Smart Building Seminar

    For a complete listing of all trade events occurring from 2006 2008, please refer to our website.

    http://www.buyusa.gov/canada/en

  • Why Monitor and Enforce Trade Agreements?Trade Agreements increase market access for U.S. exporters.

    Important to all stakeholders that existing trade agreements are being enforced.

    Create confidence and support for future trade opening agreements.

  • What Kinds of Barriers do Firms Face?Tariff and Customs Barriers

    Rules of Origin, Certificates of Origin

    Import Licensing

    Standards, Testing, Labeling, or Certification

    Lack of Intellectual Property Rights Protection

    Government Procurement Contracts

  • ITA COMPLIANCE ACTION What we do?Identify unfair treatment

    Form Compliance TeamCOUNTRY, INDUSTRY, AND AGREEMENT SPECIALISTS, GENERAL COUNSEL, FOREIGN POST, OTHER NIST, PTO

    Apply FTA/WTO Analysis

    Craft Action Plan to Resolve Issue

  • US