Archived — Research Summaries: Working Paper: Canada and Its Competitors in the U.S. Market: A Mixed Report Card for an Optimist

By Ram Acharya and Fahreen Velji.

This paper examines Canada's trade performance in the U.S. market compared to that of China, Mexico, Japan, the EU15, and other countries. In particular, the study uses a product level assessment to evaluate Canada's market share in over 16,000 products imported by the United States. The paper finds that Canada's market share declined and this reflected a fall in product penetration (the share of product categories in which Canada exports to the United States) from 73 to 70 percent. Moreover, the fall in penetration is due to a failure of new product entries to offset product exits. Market share erosion was thus, in good measure, a sign of weak innovation performance in Canada. The key issue for Canada is innovation to sustain competitive product entry.

A shorter version of the paper has been published as Canada's Share of U.S. Product Markets: Dissecting the 1998–2006 Trends in the research volume, Trade Policy Research 2010: Exporter Dynamics and Productivity (Department of Foreign Affairs and International Trade)

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