Trade
FDI
Canada Trade
Canada is a major participant in international agricultural trade. In 2010, Canada's total agri-food and seafood exports to all countries equalled nearly $38.0 billion, and corresponding imports approached $29.1 billion, according to Canadian statistics. The United States is Canada's largest agricultural trading partner, buying 52 percent of Canadian exports and supplying 58 percent of Canadian imports. In addition, Canada is the leading agricultural trade partner of the United States, when exports and imports are combined. In 2010, Canada accounted for 15 percent of U.S. agricultural exports and 20 percent of imports, as defined and categorized by USDA.
The heightened level of integration between the U.S. and Canadian agricultural sectors is due in part to the Canada-U.S. Free Trade Agreement (CUSTA), which was implemented in 1989 and subsumed by the North American Free Trade Agreement (NAFTA) in 1994. From 1989 to 1998, CUSTA and NAFTA dismantled virtually all tariff and quota barriers to Canada-U.S. agricultural trade, with a few notable exceptions: U.S. imports of dairy products, peanuts, peanut butter, cotton, sugar, and sugar-containing products and Canadian imports of dairy products, poultry, eggs, and margarine. During the CUSTA-NAFTA period, Canada-U.S. agricultural trade has expanded almost without interruption. Between 1988 (the last year prior to CUSTA's implementation) and 2010, U.S. agricultural exports to Canada expanded at a compound annual rate of 7.6 percent, while agricultural imports from Canada grew at a rate of 9.0 percent. With the recovery of the world economy in 2010, U.S. agricultural exports to Canada experienced a year-to-year increase of 7.2 percent, and corresponding imports increased by 10.4 percent.
Prior to the recent economic downturn, U.S.- Canada agricultural trade had expanded almost without interruption during the CUSTA-NAFTA period (1989-present)
chart data
Much of Canada-U.S. agricultural trade consists of intra-industry trade, meaning that within certain sectors, each country exports products to the other. In grains and feeds, intra-industry trade encompasses numerous processed products, including dog and cat food for retail sale; mixes and doughs; pastries, cake, bread, and pudding; breakfast cereal; and uncooked pastas. Beef and pork are prominent examples of intra-industry trade outside the grains and feeds sector.
Grains, fruit, vegetables, meat, and related products accounted for about 60 percent of U.S. agricultural exports to Canada in 2010. Among the leading exports were beef ($712 million), pork ($596 million), dog or cat food for retail sale ($493 million), lettuce ($399 million), and soybean meal ($364 million).
Grains, fruit, vegetables, meat, and related products made up about 60 percent of U.S. agricultural exports to Canada in 2010
chart data
Roughly 66 percent of U.S. agricultural imports from Canada in 2010 consisted of meat, grains, vegetables, fruit, and related products. Three of the five leading imports in 2010 were in the broad category of animals and animal products: live cattle and calves ($1.1 billion), beef and veal ($946 million), and pork ($868 million). The other leading imports were rapeseed oil ($1.0 billion) and wheat ($511 million).
About two-thirds of U.S. agricultural imports from Canada in 2010 consisted of meat, grains, vegetables, fruit, and related products
chart data
Selected U.S. agricultural exports to Canada Excel icon (16x16)
Selected U.S. agricultural imports from Canada Excel icon (16x16)
To view more detailed U.S.-Canada agricultural trade statistics, go to USDA Foreign Agricultural Service's Global Agricultural Trade System.
Canada FDI
Foreign Direct Investment into Canada
Canada is a major recipient of U.S. direct investment. As of the end of 2010, Canada was the third largest destination for U.S. direct investment abroad, and the total U.S. direct investment position (i.e., the stock of investment) in all sectors of the Canadian economy equaled about $297 billion on an historical cost basis.
U.S. direct investment in Canada's food and beverage industries is also substantial. At the end of 2010, Canada was the largest destination for U.S. direct investment abroad in the beverage industry and the second largest in the food industry. The U.S. direct investment position in Canada's food and beverage industries in 2010 was $5.9 billion and $7.8 billion, respectively. Mergers and acquisitions involving large firms sometimes lead to large year-to-year changes in the U.S. direct investment position in Canada's food and beverage industries. In contrast, there is little U.S. direct investment in Canadian agricultural production or the Canadian tobacco industry.
U.S. direct investment in Mexico's food and beverage industries, 1989-2011
chart data
The U.S. direct investment position in the Canadian beverage industry has experienced expansive growth over the past 20 years, marked by a compound annual growth rate of 21 percent between 1989 and 2010. Much of this growth, however, took place in a single year. Between 2004 and 2005, the U.S. direct investment position in Canada's beverage industry increased by roughly $5 billion, in part due to the merger of two prominent U.S. and Canadian breweries. Compared with the beverage industry, U.S. direct investment in the Canadian food industry has experienced more moderate growth, increasing at a compound annual rate of 5 percent between 1989 and 2010.
Of the total U.S. direct investment position in Canada's food, beverage, and tobacco industries in 2010, the beverage industry accounted for 57 percent and the food industry accounted for 43 percent. Subsectors within the Canadian food industry that are prominent recipients of U.S. direct investment include grain and oilseed milling and sugar and confectionery products, each with about 7 percent of the total.
Canada Composition
The proportion of investment going to the beverage industry has risen from about one-third of the total for the food, beverage, and tobacco industries in 1999 to consistently over one-half in the most recent years where data are available. There is no clear trend in the sectoral composition of U.S. direct investment. The shares associated with animal foods and grain and oilseed milling, for instance, do not exhibit a clear upward or downward trend, and much of the investment in the food industry falls in the category of "other food products." The U.S. direct investment position in Canadian animal production has increased over the past decade from negligible levels to $83 million in 2009.
U.S. direct investment position in Canadaian agricultural production and the food, beverage, and tobacco industries, 1999-2010
|
Industry
| 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
Millions of dollars
|
Food
| 3,693 | 3,431 | 3,421 | 4,153 | 3,964 | 2,821 | 2,718 | 2,998 | 4,393 | 4,456 | 4,973 | 5,860 |
Animal foods
|
85
|
88
|
(D)
|
37
|
53
|
48
|
57
|
74
|
127
|
141
|
166
|
185
|
Grain and oilseed milling
|
755
|
743
|
602
|
673
|
621
|
695
|
347
|
359
|
804
|
635
|
775
|
999
|
Sugar and confectionery products
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
506
|
844
|
891
|
925
|
Fruit and vegetable preserving and specialty foods
|
(D)
|
223
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
-6
|
738
|
596
|
257
|
612
|
Dairy products
|
(D)
|
17
|
(D)
|
55
|
(D)
|
(D)
|
-17
|
(D)
|
(D)
|
(D)
|
8
|
28
|
Animal slaughtering and processing
|
(D)
|
(D)
|
520
|
(D)
|
968
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
Seafood product preparation and packaging
|
(*)
|
(*)
|
(*)
|
(*)
|
(*)
|
3
|
3
|
3
|
3
|
3
|
3
|
3
|
Bakeries and tortillas
|
(D)
|
(D)
|
705
|
972
|
(D)
|
11
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
Other food products
| 1,577 | 1,126 | 1,064 | 1,507 | 1,589 | 1,519 | 1,447 | 1,264 | 1,386 | 1,445 | 1,922 | 3,092 |
Beverages and tobacco products
| 2,105 | 1,010 | 1,341 | 1,881 | 2,388 | 2,295 | 7,075 | 6,926 | 8,162 |
(D)
|
(D)
| 7,775 |
Beverages
|
(D)
|
(D)
| 1,335 | 1,873 | 2,374 |
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
| 7,753 |
Tobacco products
|
(D)
|
(D)
|
6
|
8
|
14
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
(D)
|
22
|
Agricultural production
|
-4
|
-6
|
6
|
0
|
(D)
|
(D)
|
12
|
29
|
62
|
72
|
78
|
(D)
|
Crop production
|
5
|
4
|
-2
|
-8
|
-7
|
-1
|
-1
|
-2
|
-3
|
-4
|
-5
|
-6
|
Animal production
|
-9
|
-10
|
8
|
8
|
(D)
|
(D)
|
13
|
31
|
65
|
76
|
83
|
(D)
|
|
(D)=Statistic is suppressed in order to avoid disclosure of data of individual companies.
|
(*)=Value is between -$500,000 and $500,000.
|
Source: U.S. Department of Commerce, Bureau of Economic Analysis.
|
Canadian Direct Investment in the United States
Canada is also an important source of foreign direct investment in the U.S. food industry. At the end of 2010, Canada's direct investment position in the U.S. food industry equaled about $1.4 billion on a historical cost basis, which makes Canada the sixth largest foreign investor in the U.S. food industry. Over the past 15 years, the Canadian direct investment position in the U.S. food industry has fluctuated, usually within the range of $1.0 billion to $1.5 billion. As is the case with U.S. direct investment in Canada's food and beverage industries, mergers and acquisitions involving large firms can result in large year-to-year changes in the Canadian direct investment position in the U.S. food industry.
