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Jamaica's Canadian surplus stays unfaltered
Wednesday, March 24, 2010
Jamaica recorded a US$25.4 million ($2.2 billion) trade surplus with Canada despite the alumina fallout in 2009 indicating the continuation of the beneficial trading relationship.
Canada is the only major trading partner with which Jamaica has a surplus.
Jamaica's trade surplus with the North American nation was US$25.4 million between January to November 2009 the lowest level since the 2000 calendar year according to the Statistical Institute of Jamaica.
The highest surplus was US$195.9 million recorded in 2007; the dip reflects the fall of alumina exports to Canada at US$90.7 million between January to November 2009 versus US$232.1 million during the 2008 calendar year.
Activity in Jamaica's bauxite sector dipped some 50 per cent in 2009 due to reduced demand stemming from the worldwide economic downturn.
Interestingly, Jamaica's third largest export to Canada was ackee, the national fruit which earned US$2.5 million between January to November 2009.
Jamaica's largest import product from Canada included saltfish, fish, crustaceans and molluscs at US$14.5 million up to November 2009 versus US$21.5 million in 2008 calendar year.
Remittances from Canada increased 13 per cent to US$179 million in 2009 over 2008 despite US and UK originated remittances which declined over the same period according to Bank of Jamaica data.
Canada's tourism arrivals have grown more than twice the rate of growth in total arrivals over the last five years according to Jamaica Tourist Board data. Specifically, in 2009, some 290,300 Canadian stopover tourists arrived in Jamaica, 23 per cent more than the previous year.
Canada now accounts for the second largest tourism market after the US which accounts for 61 per cent of the total 1.8 million in stopover tourists. Canada which has one-tenth the population of US, surpassed the UK in tourism arrivals to Jamaica in 2007.
Jamaica for decades has run a sustained trade deficit requiring an additional US$3.35 billion in exports just to equal imports. The trade deficit however was a 41 per cent improvement over 2008 following a sustained economic crisis and a contraction in demand worldwide.
Policy options include dissuading imports via non tariff barriers. However, last week local economist Damien King (Phd) maintained that a tax on imports is a tax on exports.
"Any action that a government takes that affects either imports or exports is going to affect the other side of the trade balance sheet. It is a fact that imports and exports do indeed tend to move together."
Dr King is a supporter of the American economist Abba Lerner's 'The Symmetry Between Import and Export Taxes'. Lerner maintained that an import tariff could have the same effects as an export tax.
"If it is true that imports and exports tend to move together most of the time, then it would follow that the level of imports and exports are not going to diverge too far from each other," said Dr King.
He produced information from the IMF's data base which showed that there are no countries in the world that simultaneously have high exports and low imports or high imports and low exports, proving that a country has both variables high or both variables low. This supports the view that they tend to move together
Wednesday, March 24, 2010
Jamaica recorded a US$25.4 million ($2.2 billion) trade surplus with Canada despite the alumina fallout in 2009 indicating the continuation of the beneficial trading relationship.
Canada is the only major trading partner with which Jamaica has a surplus.
Jamaica's trade surplus with the North American nation was US$25.4 million between January to November 2009 the lowest level since the 2000 calendar year according to the Statistical Institute of Jamaica.
The highest surplus was US$195.9 million recorded in 2007; the dip reflects the fall of alumina exports to Canada at US$90.7 million between January to November 2009 versus US$232.1 million during the 2008 calendar year.
Activity in Jamaica's bauxite sector dipped some 50 per cent in 2009 due to reduced demand stemming from the worldwide economic downturn.
Interestingly, Jamaica's third largest export to Canada was ackee, the national fruit which earned US$2.5 million between January to November 2009.
Jamaica's largest import product from Canada included saltfish, fish, crustaceans and molluscs at US$14.5 million up to November 2009 versus US$21.5 million in 2008 calendar year.
Remittances from Canada increased 13 per cent to US$179 million in 2009 over 2008 despite US and UK originated remittances which declined over the same period according to Bank of Jamaica data.
Canada's tourism arrivals have grown more than twice the rate of growth in total arrivals over the last five years according to Jamaica Tourist Board data. Specifically, in 2009, some 290,300 Canadian stopover tourists arrived in Jamaica, 23 per cent more than the previous year.
Canada now accounts for the second largest tourism market after the US which accounts for 61 per cent of the total 1.8 million in stopover tourists. Canada which has one-tenth the population of US, surpassed the UK in tourism arrivals to Jamaica in 2007.
Jamaica for decades has run a sustained trade deficit requiring an additional US$3.35 billion in exports just to equal imports. The trade deficit however was a 41 per cent improvement over 2008 following a sustained economic crisis and a contraction in demand worldwide.
Policy options include dissuading imports via non tariff barriers. However, last week local economist Damien King (Phd) maintained that a tax on imports is a tax on exports.
"Any action that a government takes that affects either imports or exports is going to affect the other side of the trade balance sheet. It is a fact that imports and exports do indeed tend to move together."
Dr King is a supporter of the American economist Abba Lerner's 'The Symmetry Between Import and Export Taxes'. Lerner maintained that an import tariff could have the same effects as an export tax.
"If it is true that imports and exports tend to move together most of the time, then it would follow that the level of imports and exports are not going to diverge too far from each other," said Dr King.
He produced information from the IMF's data base which showed that there are no countries in the world that simultaneously have high exports and low imports or high imports and low exports, proving that a country has both variables high or both variables low. This supports the view that they tend to move together