The National Post reports in its Wednesday, April 16, edition that economists warn that Canada's attempts to diversify its exports away from the U.S. market will be hindered by the strong ties between the two economies. The Post's Simon Tuck writes that trade diversification has long been a priority for Canada, especially in light of recent tariff threats. However, experts like Brian Lee from the Macdonald-Laurier Institute dismiss suggestions of significant diversification, such as joining the EU, as unrealistic. While there are benefits to diversification, the market realities indicate that the U.S. will remain Canada's primary trade partner for the foreseeable future. There are also other sturdy barriers to diversifying trade.
CIBC economist Benjamin Tal said transportation costs soar once a North American company exports overseas.
There can also be added linguistic, cultural and regulatory questions and additional costs and headaches associated with the need to open overseas sales offices. CIBC says the percentage of Canadian exports headed to the U.S. market is now 76 per cent, the same as a decade ago, while American goods and services account for 50 per cent of Canadian imports, slightly less than a decade ago.
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