Adding Value to Trade: Moving Beyond Being Hewers of Wood

Using value-added trade measures, this briefing sheds light on Canada’s trade strengths and explores ways to maintain those as trade patterns are being transformed by global value chains.

Document Highlights

This briefing is the third and last in a series exploring the concept of value-added trade and how it affects the understanding of Canada’s trade relationships with the rest of the world. Value-added data complement conventional trade measures and provide a more accurate picture of where the value is created in Canadian exports and where our strengths lie. Unsurprisingly, natural resources are at the root of Canada’s trade strength. However, in order for Canada to maintain its trade strength in natural resource related industries, industries supporting the primary sector also have to be competitive with world standards. Also, with global value chains reshaping entire industries, comparative advantage now changes more rapidly than ever. As a result, it is very difficult to use policy to provide particular industries with a sound and lasting comparative advantage.