Trade is essential to Manitoba’s economy. International exports and imports represented 46.4% of its gross domestic product in 2018.
With a large goods-related industry estimated at 26.9% of GDP in 2019, Manitoba needs strong trading partners to help grow its economy.
In 2019, 30.6% of its exports were resource-based goods, down from 35.6% in 2018
In contrast, exported manufactures accounted for 69.4% of Manitoba’s GDP, up from 64.4% in 2018.
As researcher Gregory M. Spencer says, âThe value of Manitoba’s exports has roughly doubled over the past two decades, (while) the value of imports has nearly tripled.
In 2019, the United States accounted for 75% of Manitoba’s exports. In 1999, this share was over 80 percent, falling to 60 percent in 2011 before rising again. This development is linked to the development of trade with Asia and countries like China.
Trade with the United States has increased due to international politics and growing tensions between North America and China. The Conference Board of Canada reported that, “China’s ban on Canadian canola exports resulted in a significant drop in Manitoba exports to China in 2019.”
As Manitoba’s main trading partner, the United States is important – as a close neighbor, logistics costs are lower than other trading partners.
But the relationship can be precarious due to US policy, especially with the rise of protectionism under the presidencies of Donald Trump and now Joe Biden.
Spencer’s report for the World Trade Center Winnipeg highlights the clusters of the Manitoba economy, particularly in industry. The main sectors in terms of trade volume are agriculture and food, transport and logistics, mining and metals, aerospace and agricultural equipment.
The fastest growing and most promising sectors for the future of commerce are digital and precision agriculture, protein, next-generation buses, transportation and logistics, and aerospace.
Agriculture, transportation and logistics are the leaders in Manitoba trade. The United States represented $ 2.7 billion value of Manitoba agri-food exports in 2018.
In some areas, the province even has a competitive advantage over the United States.
The Conference Board of Canada says, âCanadian factories that produce sweet products have access to sugar at a lower cost compared to their American counterparts. This is because the protectionist trade policies of the United States inflate the prices of sugar. Despite US measures to protect its sugar industry from international competition, Canadian sugar confectionery products have had access (to some extent) to the US market through tariff rate quotas (TRQs).
Over the past 20 years, Manitoba has signed agreements with a number of US states to improve relationships and business potential: Minnesota, Texas, California, Wisconsin, Illinois, Indiana and North Dakota. Manitoba also signed a joint agreement in 2002 with Iowa, Minnesota, North Dakota, Saskatchewan, South Dakota and Nebraska.
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Most of these agreements offer the same vision: â(To) facilitate cooperation in agricultural research and development, trade and investment, and exchanges between participants, while respecting overall economic development strategies and business development plans of the participants and with a long-term strategy of mutual benefit and shared growth.
Manitoba should use its advantages to stimulate trade in these states.
Protectionism is always a threat, but Canada shares the same core values ââas the United States, and that should facilitate long-term agreements.
Alexandre Massaux is an associate researcher at the Frontier Center for Public Policy.
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