OTTAWA May 2 Strong commodity prices mean the
value of Canadian goods exports will jump 6 percent in 2017
after a drop last year, Canada's export credit agency said on
Tuesday, playing down possible disruption to the North American
Free Trade Agreement (NAFTA).
In its semi-annual forecast, Export Development Canada
predicted exporters should benefit this year from a stronger
U.S. economy and a weak Canadian dollar. Canada sends 75 percent
of all goods exports to the United States.
Those exports shrank by 2.6 percent in 2016, pulled down in
part by lower prices for a wide range of goods, including a 17.1
percent drop in energy.
"A main driver of export growth this year will be energy,
with exports growing by an incredible 18 percent after a very
weak 2016," said the forecast.
Overall services exports should increase by 5 percent,
slightly more than the 4.8 percent advance seen in 2016.
Canada's export sector could be hit hard if U.S. President
Donald Trump carries out a threat to withdraw from the NAFTA
pact with Canada and Mexico.
Washington last week slapped tariffs on Canadian lumber
exports and expressed unhappiness with what it calls unfair
trading practices by Canada's dairy farmers. Neither the dairy
nor the lumber sectors are covered by NAFTA.
Export Development Canada chief economist Peter Hall said he
was not overly worried by the potential for major changes to
NAFTA, saying that while the administration was focusing on
individual sectors, he saw little evidence of a real sustained
desire to harm the bilateral trading relationship.
"Any time there is (a suggestion) that is going for the
architecture of trade, that would actually inflict a lot of pain
not just on those it's aimed at but the domestic U.S. economy,
there are repeated U-turns from those positions," he said.
One example was the debate in Washington over imposing
border tariffs, he added.
Last week, Trump said he pulled back from killing the
23-year-old trade pact with Canada and Mexico after requests
from the two countries' leaders and expressed optimism about
winning better U.S. terms in a renegotiated deal.
(Reporting by David Ljunggren; Editing by Jonathan Oatis)