Canada and the Americas: Strengthening trade ties with countries close to home
This month, CanadExport takes a special look at Canada’s trade and investment relationships with its neighbours in the Americas. The topic is a timely one given Canada’s participation in the ninth Summit of the Americas that took place in Los Angeles earlier this month; Chilean President Gabriel Boric’s recent visit to Canada; and the anniversaries over the summer months of Canada’s free trade agreements with the United States and Mexico (July 1), Chile (July 5) Peru (August 1) and Colombia (August 15).
In keeping with Canada’s strong and growing economic ties with partners throughout the Americas, our focus will not only be on our closest neighbours to the south, but on countries in every part of the hemisphere: North, Central and South America, and the Caribbean.
The numbers clearly show the size and scope of these relationships:
- Canada and the U.S. share one of the largest trading relationships in the world, which is underpinned by long‑standing binational supply chains. Bilateral trade in merchandise and services was valued at more than $1 trillion in 2021. That year, Canada was the U.S.’s largest trading partner in merchandise and services.
- Canadian trade and investment with Mexico is steadily growing, with more than $41.7 billion in two‑way merchandise trade in 2021. Mexico is Canada’s third‑largest single‑country merchandise trading partner, after the U.S. and China. Canada was Mexico’s sixth‑largest merchandise trading partner in 2021. Canadian direct investment in Mexico, meanwhile, stood at $25 billion in 2021, making Mexico Canada’s ninth‑largest direct investment destination.
- Canada’s bilateral merchandise trade with the rest of Latin America and the Caribbean totalled $29.5 billion in 2021. Two‑way trade in services totalled $15.4 billion in 2020.
While these statistics are significant, they don’t tell the full story of Canada’s extensive trade and economic ties in the region. Those links include seven free trade agreements (FTAs) covering eight countries: Chile, Colombia, Costa Rica, Honduras, Mexico, Panama, Peru and the U.S. The agreements give Canadian businesses a major competitive advantage in these markets over companies from non‑FTA countries.
To deepen Canada’s economic ties and secure even more opportunities for Canadians in the hemisphere, FTA negotiations are also underway with the Mercosur bloc, which includes Brazil, Canada’s top trading partner in South America and the largest market in the region with which we don’t currently have an FTA.
Canada also has Foreign Investment Promotion and Protection Agreements with eight countries in the Americas (Argentina, Barbados, Costa Rica, Panama, Peru, Trinidad and Tobago, Uruguay and Venezuela), as well as 30 air transport agreements in the region.
Building on this strong foundation by bolstering Canada’s trade and investments relationships in the Americas has become increasingly important in recent years. Supply‑chain challenges caused by the COVID‑19 pandemic and other global events have demonstrated the crucial importance of diversifying export markets. For the same reason, it’s now more important than ever to maintain and extend regional trade networks and value chains, and create new ones.
Here again, Canada has advantages over many competitor countries. We share the same time zones as our trading partners in the hemisphere, which makes it easier to visit, and do business in, each other’s markets. More importantly, Canada has a strong brand and good reputation in the region; Canadian companies are known for their high standards and commitment to responsible business conduct, and seen as transparent and reliable commercial partners and a trusted source of investment.
While countries in Latin America and the Caribbean were particularly hard hit by the pandemic, Canada is well positioned to meet the region’s needs in key sectors as economies recover and countries look to build resilience.
There’s strong demand for Canadian expertise and know‑how in industries where Canada is already heavily invested in the region, such as financial services and extractives. Opportunities also abound in other sectors and areas where Canadian companies excel, including clean tech and renewable energy; agriculture and agri‑food; infrastructure; education; science, technology and innovation; life sciences; artificial intelligence; e‑commerce; and digitalization and digital transformation.
For help in identifying and taking advantage of specific opportunities in the Americas, Canadian companies are encouraged to get in touch with the Canadian Trade Commissioner Service (TCS). The TCS offers expert advice, local contacts and on‑the‑ground support to Canadian companies seeking to do business in markets throughout the region. Trade Commissioners have in‑depth knowledge of their markets and sectors of focus, and the TCS has an extensive presence across the hemisphere. Its regional footprint includes 16 trade offices in the U.S. alone; six offices in Brazil; three in Mexico; and 16 across the rest of Latin America and the Caribbean.
Trade Commissioners can also help businesses navigate and better understand Canada’s many FTAs with countries in the Americas, and take full advantage of the benefits they offer for expansion in the region.
In addition, the TCS organizes or supports events, business delegations and International Trade Minister‑led trade missions throughout the hemisphere. For example, the TCS organized a Minister‑led Canada–Caribbean trade mission to the region in April of 2022, which included in‑person visits to Guyana and Jamaica, and a virtual program for both of those countries as well as Barbados and Trinidad and Tobago. A total of 172 companies registered for the trade mission, which was focused on clean tech and green infrastructure. A full list of upcoming events, business delegations and trade missions is available on the TCS website, and can be filtered by country and/or sector.
In this month’s edition of the magazine, we highlight some of the concrete results of this economic engagement by Canada throughout the Americas, and explore how Trade Commissioners are helping Canadian companies succeed in the region. We begin with a feature article on the 25th anniversary of the Canada–Chile Free Trade Agreement. Next, after our two earlier Spotlight from the Field articles on the TCS in Mexico City and São Paulo, we bring you the latest installment in the series, in which we profile the Colombian market and the work of the TCS office in Bogota.
Elsewhere in this issue, we showcase a trio of Canadian companies that have expanded into a number of countries in the Americas with support from the TCS: a Montreal‑based software firm; a Calgary‑based water instrumentation company; and a Vancouver‑based biotechnology company.
This edition of CanadExport is our last before we take a summer break. We hope that you’ll find it informative, and learn more about markets and opportunities throughout the Americas and how you can do business and succeed in this dynamic region with help from the TCS and its funding and support programs.
Happy reading, have a great summer and see you in the fall!
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