Thursday, April 30, 2009

Canada is an Important Partner and Investor in the Pittsburgh Region's Economic Growth

Like the United States, Canada held national elections last year, and like Barack Obama, Canadian Prime Minister Stephen Harper faces a long list of challenges, including a struggling world economy, complex energy and environmental issues, the nation’s soldiers standing in harm’s way in far-away conflicts, and competing demands and differing agendas in the halls of government.

There are many good reasons for both administrations to share concerns about their mutual challenges. The U.S. and Canada have one of the largest, most integrated economic partnerships in the world, including the largest two-way trading relationship.

Canada is this country’s top export destination, meaning Canadians buy more from the U.S. than all European Union countries combined, and four times more than China. Pennsylvania, like more than two-thirds of U.S. states, exports more products to Canada than any other country, exceeding $9 billion per year.

Pittsburghers should be very interested in trade with Canada since two-way trade between Canada and the Commonwealth topped $20 billion in 2007, supporting more than 295,250 jobs in Pennsylvania.

The Pittsburgh region shipped over $2.1 billion worth of goods to Canada in 2007, nearly three times more than any other country.

Canadian investment in Pennsylvania has grown every year, and the Pittsburgh region is home to 36 companies with Canadian ties, including NOVA Chemicals, Bombardier Transportation and Hatch Engineering. Canadian firms employ 4,300 people at 59 locations in the region. Canadian visitors to Pennsylvania numbered more than 750,000 last year and spent more than $130 million.

Canada is a major partner in U.S. energy security. Canada has the second-largest oil reserves in the world. Only Saudi Arabia has more. The U.S. imports far more oil and energy products from Canada than from any other country. Canada supplies more crude oil to the U.S. than Saudi Arabia and Iraq combined. Canadian oil companies are major investors in the U.S. petroleum industry, providing jobs and income for Americans.

Since the Canada–U.S. Free Trade Agreement was signed in 1988 — and then NAFTA in 1992 — there is evidence that bilateral trade has been a major driver of economic growth on both sides of the border. Over the last two decades, Canada-U.S. trade has tripled. Investment flows have also increased substantially.

Given the scale of this success, the path to continued economic growth for the two countries may lie in the North American supply chains.
These are the highly-integrated international networks through which components or services are acquired, transformed and delivered to customers — rather than within one country.

North America's competitive position in the global marketplace relies on the strength and efficiency of these cross-border supply chains. This does not mean that the U.S. drops container-loads of finished products on Canadian shores. The essence of these supply chains is that the two countries make things together—thereby improving the competitiveness of the final product through lower cost, better technology or better design.

For more information, CLICK HERE to go to the website of the Canadian Consulate in Buffalo.

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