OTTAWA—The Conference Board of Canada says the United States will remain Canadas largest trading partner by far by 2025, but a new report says emerging markets offer the greatest potential for export growth.
According to What Might Canadas Future Exports Look Like?, an analysis of the nations export dealings around the globe, Canadas exports to India, Mexico, China and Brazil are projected to increase by less than two per cent each over the next 13 years.
An important shift is underway, Conference Board principal economist Kip Beckman said in a statement.
Trade with the U.S. has not grown in real terms over the past decade, Beckman continued. At the same time, Canadas trade with fast-growing markets elsewher is taking off.
According to the Conference Board, Canadas goods exports to China soared from less than $3-billion in 1990 to $15-billion by 2011.
based on the assumptions of a Chinese average annual growth rate of close to seven per cent, Canadian exports are projected to hit the $45-billion mark by 2025.
At that point, Chinas share of Canadian goods exports would increase to 6.8 per cent from three per cent at present.
The same pattern is visible in other fast-growing markets, the Conference Board says.
The share of Canadas goods exports to India will more than double to 1.9 per cent of overall trade by 2025; exports to Mexico will also rise as a share of overall trade, from 1.2 per cent today to two per cent in 2025; and trade with Brazil will also double by 2025 to reach 1.3 per cent of overall Canadian exports, according to the report.
In contrast, it says Canadas goods exports to the U.S. are projected to expand by about two per cent annually through 2025 on average, which is actually an improvement from the flat growth in volumes over the past decade.
Nevertheless, the share of Canadas overall goods exports that go to the U.S. will dro from almost 75 per cent in 2010 to 68 per cent in 2025.
Assuming that the European unio (EU) can solve some of its current economic woes and the eurozone stays intact, merchandise exports from Canada to the eurozone are expected to expand at a modest pace.
From a four per cent of share of Canadas exports at present, the EU could increase its share to 5.6 per cent by 2025.
Exports to the United Kingdom and Japan are forecast to decline as a share of Canadas exports, largely because of weak projections for economic growth in both economies.
The U.K. share of goods exports is expected to fall from 2.9 per cent today to 1.9 per cent in 2025, according to the Conference Board, while it projects Japans share to dro from 2.3 per cent at present to 1.6 per cent by the end of the forecast period.
Despite the projected growth opportunities in the aforementioned emerging markets, Beckman said those opportunities may not bear fruit if Canadas infrastructure is not up to the challenge of handling demand for raw material export.
