Alberta’S Export Experience Under Free Trade Agreements: 1988 - 2007

The international involvement of Alberta-based businesses covers trade in goods, trade in services, and Foreign Direct Investment (FDI), both inward and outward. Increasingly FDI is linked to trade in goods and services. Indeed, the export of services like consulting or construction engineering tends to involve the setting up of supporting facilities abroad (outward FDI), and exports of goods frequently necessitate the provision of maintenance services in their wake, either across the border or through an office abroad. Data on outward FDI by Alberta-based firms are not available, nor are data on exports of services by province of origin. Therefore an analysis of what has been happening to Alberta’s international commercial relations is of necessity limited to merchandise trade. This report focuses on the export performance of Alberta since the entry into force of the Canada-US Free Trade Agreement (FTA) in 1989, the North American Free Trade Agreement (NAFTA) in 1994, and free trade agreements with Chile, Israel and Costa Rica in 1997, 1997 and 2002, respectively. These agreements were negotiated to improve the market access for Canadian producers, and it is the purpose of this report to pursue the extent to which these trade agreements have achieved their objective for Alberta-based exporters. Exports are valued in Canadian dollars unless stated otherwise and are classified using the Harmonized System (HS), the internationally standardized product categorization developed by the World Customs Organization (WCO). The data sources are the World Trade Atlas, compiled by Global Trade Information Services Inc., the Trade Information Enquiry Retrieval System (TIERS) of Statistics Canada, and Statistics Canada’s population and employment figures. As many Alberta firms are participants in supply chains that cross international borders, exports of goods may well contain imported components. It is not possible to determine where the constituent components of an export are source because data are based on customs forms that capture only the total value of the shipment. For that reason, this report focuses on the value of total merchandise exports from Alberta. It gives a partial, but given the data constraints, the best possible picture of the international activities of Alberta-based companies.