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.
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).
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).
Selected U.S. agricultural exports to Canada 
Selected U.S. agricultural imports from Canada
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.
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.
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.