Tuesday, September 21, 2010

Canada-EU Trade Talks Need Wider Focus on Services: Report

(Canoe.com – Stefania Moretti)

Canada is at the bargaining table with European Union trade officials and the stakes are much higher than many would think, according to a new report by the Conference Board of Canada. That’s because Canada’s trade with the EU is grossly underestimated, the think-tank said.

Conventional trade analysis paints a narrow picture of the trade relationship, focusing mostly on hard goods trade and largely missing the service trade. Ignoring the value-added supply chain could leave Canada in a defensive position, essentially closing the door to substantial trade growth, it said.

“The entire agreement could fall apart if this narrow approach prevails, costing us better access to a broad range of long-term economic opportunities,” Danielle Goldfarb, associate director of the Conference Board’s international trade and investment centre, said in a release.

The report, entitled “Canada’s ‘Missing’ Trade with the European Union,” uses Research In Motion’s BlackBerry to illustrate the benefits of integrative trade. Designed in Waterloo, Ont., the BlackBerry is made of parts from companies all over the globe and assembled in either Hungary or Mexico. On top of manufacturing hardware for maximum returns, RIM also collects subscription fees from wireless carriers all over the world. The multilayer linkages make RIM an extremely sustainable profit model.

Yet traditional trade data would only consider a BlackBerry sale to an Asian consumer as an export from Hungary, entirely missing Canada, which accounts for a sizable portion of the collected revenue. Read more here.