1. Exporting to Canada #1 Market for U.S. Exports Export Opportunities for U.S. Companies Dana M. Hicks Honorary Canadian Consul-Charlotte Charlotte, NC April 14, 2010

2. Canadians and Americans share common challenges Global financial challenges Global financial challenges The emergence of powerful economic competitors such as China and India The emergence of powerful economic competitors such as China and India The need to stimulate economic growth and promote job creation The need to stimulate economic growth and promote job creation The need to maintain security The need to maintain security 2

3. But we also share mechanisms that can help us respond to these challenges… Both countries are highly industrialized, well established democracies Both countries are highly industrialized, well established democracies Both are leading members of numerous important economic and political organizations, including the G8, APEC and NATO Both are leading members of numerous important economic and political organizations, including the G8, APEC and NATO Both are partners in a North American Free Trade Agreement that has nurtured one of the largest and most complex economic partnership in the world Both are partners in a North American Free Trade Agreement that has nurtured one of the largest and most complex economic partnership in the world 3

4. And we have an established relationship upon which we can build… Canada is by far the largest buyer of US goods: over USD $260 Billion in 2008. Canada is by far the largest buyer of US goods: over USD $260 Billion in 2008. More than 8 million U.S. jobs are supported by trade with Canada (2008) More than 8 million U.S. jobs are supported by trade with Canada (2008) More than 16,000 company locations in the U.S. are Canadian owned: they employ 557,000 Americans (2009) More than 16,000 company locations in the U.S. are Canadian owned: they employ 557,000 Americans (2009) For every $1 worth of goods China buys from the U.S., Canada buys almost $4 ($3.77). For every $1 worth of goods China buys from the U.S., Canada buys almost $4 ($3.77). More than 50% of our bilateral trade moves by truck. …we can use this to strengthen both countries. More than 50% of our bilateral trade moves by truck. …we can use this to strengthen both countries. 4

5. Canada-U.S. trade Canada ’ s trade in goods and services with the U.S. is more than twice the size of its trade with the rest of the world. The U.S. trades more with Canada than with any other country. 5 Source: Statistics Canada – October 2009 REGIONAL SHARES OF CANADA’S TRADE IN GOODS AND SERVICES, 2004 AND 2008 (PERCENT) ExportsImportsTotal Trade 200420082004200820042008 World100.0 US78.572.867.162.473.167.7 EU7.79.311.211.69.310.5 Japan2.32.42.92.6 2.5 Other OECD 3.64.55.86.04.65.3 Non- OECD 8.011.013.017.410.314.1

6. 6 Canada and the U.S. enjoy the largest bilateral trading partnership in the world... Source: Statistics Canada Two-way trade in goods and services totaled USD $676.3 billion in 2008: trade was flowing between the two countries at a rate of about USD $1.8 billion dollars a day!!! U.S. to Canada Canada to U.S.

7. Our Solid Foundation Almost a fifth of our merchandise trade is in automobiles, trucks and parts: one of the world’s largest single integrated industrial value chains; Almost a fifth of our merchandise trade is in automobiles, trucks and parts: one of the world’s largest single integrated industrial value chains; More than half of total merchandise trade, including a wide assortment of materials and products (i.e. plastics, machinery, medicines, equipment), is used as inputs for other goods; More than half of total merchandise trade, including a wide assortment of materials and products (i.e. plastics, machinery, medicines, equipment), is used as inputs for other goods; Close to 29% of Canada – U.S. trade in goods represent intra-firm trade according to the U.S. Bureau of Economic Analysis Close to 29% of Canada – U.S. trade in goods represent intra-firm trade according to the U.S. Bureau of Economic Analysis … our trade is based on the fact that we make things together! 7

8. Geographic proximity Many Canadian production hubs are closer to key US markets than corresponding American centres. Many Canadian production hubs are closer to key US markets than corresponding American centres. Of Canada ’ s 20 largest cities, 17 are within 100 miles of the border. Approximately 90% of Canadians live within this distance. Of Canada ’ s 20 largest cities, 17 are within 100 miles of the border. Approximately 90% of Canadians live within this distance. Mexico City 1000 km 500 km Los Angeles Denver Houston Atlanta Seattle Miami New York Boston Philadelphia Washington Baltimore Detroit Chicago Cleveland St. Louis Pittsburgh Milwaukee San Francisco St. John's Calgary Vancouver Regina Halifax Toronto Montréal Winnipeg Charlottetown Edmonton Victoria Ottawa Windsor Québec Fredericton Saskatoon 8

9. Our Connectivity Rail From an infrastructure perspective, the border is not obvious From an infrastructure perspective, the border is not obvious 9 Road Power

10. Physical integration supports a huge trade in energy… 2008 was the 17 th consecutive year in which Canada has been the largest supplier of energy to the U.S. The single most reliable and secure energy partner to the United States. 2008 was the 17 th consecutive year in which Canada has been the largest supplier of energy to the U.S. The single most reliable and secure energy partner to the United States. In 2008, energy exports to the U.S. equalled 92.9% of Canada’s total energy exports. In 2008, energy exports to the U.S. equalled 92.9% of Canada’s total energy exports. The value of crude and non-crude oil supplied to the U.S. by Canada was USD $76.4 billion (2.5M bl/day). This trade will continue well into the future since Canada contains an estimated 178 billion barrels of recoverable oil, second only to Saudi Arabia. The value of crude and non-crude oil supplied to the U.S. by Canada was USD $76.4 billion (2.5M bl/day). This trade will continue well into the future since Canada contains an estimated 178 billion barrels of recoverable oil, second only to Saudi Arabia. 10 North American Gas Pipeline Grid North American Crude Oil Pipeline Grid

11. The Canada-U.S. relationship creates jobs for Americans… For 35 of the 50 states, Canada is their most important export market; For 35 of the 50 states, Canada is their most important export market; These states are not confined to the border, but are spread across the entire country; These states are not confined to the border, but are spread across the entire country; It is estimated that Canada-U.S. trade supports more than 8 million U.S. jobs. (2008) It is estimated that Canada-U.S. trade supports more than 8 million U.S. jobs. (2008) 11

12. 88 Canadian companies have operations in North Carolina. 208,500 Jobs in NC are supported by Canada-U.S. trade. 12 Canada was North Carolina’s top export market in 2008

13. North Carolina-Canada Trade Facts Top exports to Canada 2008 Motor vehicle parts, except engines..............$384 million Computers..................................................$283 million Medical, ophthalmic & orthopedic supplies....$256 million Furniture & fixtures.....................................$144 million Power shovels............................................$130 million

14. North Carolina-Canada Trade Facts Top imports from Canada 2008 Medicine, in dosage.......................................$351 million Medicine, in dosage.......................................$351 million Softwood lumber...........................................$188 million Softwood lumber...........................................$188 million Synthetic rubber & plastics.............................$173 million Synthetic rubber & plastics.............................$173 million Basic plastic shapes & forms..........................$129 million Basic plastic shapes & forms..........................$129 million Organic chemicals.........................................$124 million Organic chemicals.........................................$124 million

15. North Carolina-Canada Trade Facts Top trading provinces 2008 Ontario...........................................................$5.7 billion Ontario...........................................................$5.7 billion Quebec..........................................................$1.3 billion Quebec..........................................................$1.3 billion Alberta.........................................................$413 million Alberta.........................................................$413 million Manitoba......................................................$348 million Manitoba......................................................$348 million British Columbia............................................$297 million British Columbia............................................$297 million

16. 56 Canadian-owned companies operate in at least 291 locations in South Carolina. 95,250 Jobs in SC are supported by Canada-U.S. trade. 16 Canada was SC second-largest export market in 2008

17. South Carolina-Canada Trade Facts Top exports to Canada Automobiles................................................$299 million Motor vehicle parts, except engines..............$167 million Paper & paperboard....................................$137 million Unshaped plastics.......................................$104 million Air conditioning & refrigeration equipment....$102 million

18. South Carolina-Canada Trade Facts Top imports from Canada 2008 Petroleum & coal products.............................$190 million Petroleum & coal products.............................$190 million Synthetic rubber & plastics............................$121 million Synthetic rubber & plastics............................$121 million Organic chemicals...........................................$80 million Organic chemicals...........................................$80 million Motor vehicle parts, except engines..................$79 million Motor vehicle parts, except engines..................$79 million Yarn, thread, cordage, twine & rope.................$79 million Yarn, thread, cordage, twine & rope.................$79 million

19. South Carolina-Canada Trade Facts Top trading provinces Ontario..........................................................$2.9 billion Ontario..........................................................$2.9 billion Quebec........................................................$872 million Quebec........................................................$872 million Alberta.........................................................$220 million Alberta.........................................................$220 million Nova Scotia..................................................$217 million Nova Scotia..................................................$217 million British Columbia............................................$214 million British Columbia............................................$214 million

20. Canada is a significant investor in the U.S. Canadian-owned businesses in the United States 48.8% of Canada’s foreign direct investment has been located in the U.S. - the single largest destination of Canadian investment abroad. Geographic Distribution of Outward FDI Stock from Canada, 2008 20

21. And our partnership is part of a larger North American context…. The U.S. is also Mexico’s largest trading partner The U.S. is also Mexico’s largest trading partner Mexico is the U.S.’s 3 rd largest trading partner after Canada and China Mexico is the U.S.’s 3 rd largest trading partner after Canada and China Mexico is Canada’s 5 th largest trading partner Mexico is Canada’s 5 th largest trading partner NAFTA is clearly working: Under NAFTA merchandise trade between Canada, the US and Mexico has tripled, reaching US $946.1 billion in 2008. NAFTA is clearly working: Under NAFTA merchandise trade between Canada, the US and Mexico has tripled, reaching US $946.1 billion in 2008. NAFTA has emerged as one of the world’s largest economic regions (28.0% of global GDP). NAFTA has emerged as one of the world’s largest economic regions (28.0% of global GDP). … these advantages can help us weather the current period of global uncertainty. 21

22. The size and diversity of our relationship hides a significant constraint… Most of our trade flows through only a few border crossings 22

23. Yet the number of people using the border is still significant… Air: 20.8 million Trucks: 11.5 million 23

24. Commitment to a safe and secure Canada – U.S. border Canada and the U.S. have a long history of cooperation and consultation on security measures at our shared border Canada and the U.S. have a long history of cooperation and consultation on security measures at our shared border Canada is investing in border infrastructure to increase security and economic prosperity Canada is investing in border infrastructure to increase security and economic prosperity 24 Our goal is to facilitate the smooth flow of legitimate goods and people while ensuring a secure border Our goal is to facilitate the smooth flow of legitimate goods and people while ensuring a secure border

25. The United States and Canada share the following border goals: Develop joint threat and risk assessments Develop joint threat and risk assessments Advance initiatives that manage risk while facilitating the movement of legitimate goods and people Advance initiatives that manage risk while facilitating the movement of legitimate goods and people Endeavour to share information Endeavour to share information Where necessary, ensure we have the separate systems to protect the border Where necessary, ensure we have the separate systems to protect the border Expand integrated law enforcement operations Expand integrated law enforcement operations Leverage resources between our 2 countries Leverage resources between our 2 countries

26. Canada and the U.S. are cooperating to ensure the border remains a highway and not a barrier… FAST (fast movement of pre-approved eligible goods by truck) FAST (fast movement of pre-approved eligible goods by truck) NEXUS (special program for frequent travelers) NEXUS (special program for frequent travelers) Harmonized commercial processing for commercial shipments Harmonized commercial processing for commercial shipments(e-manifests) Implemented the "24-Hour Rule" for marine shipments destined to North America (advanced cargo notification) Implemented the "24-Hour Rule" for marine shipments destined to North America (advanced cargo notification) Improved infrastructure and border processing times Improved infrastructure and border processing times SMART borders will enhance security while improving economic efficiency 26

27. Conclusion In a period of profound adjustment, it is important to recognize a vital source of wealth creation. In a period of profound adjustment, it is important to recognize a vital source of wealth creation. North American economic integration has contributed to the creation of new jobs, new economic opportunities, and new sources of competitive advantage. North American economic integration has contributed to the creation of new jobs, new economic opportunities, and new sources of competitive advantage. During a period of global uncertainty, our relationship is a foundation for strengthening both countries. During a period of global uncertainty, our relationship is a foundation for strengthening both countries. Maintaining efficient physical linkages is key to our mutual competitive advantage. Maintaining efficient physical linkages is key to our mutual competitive advantage. 27