The Canadian international merchandise trade program
Introduction
The objective of this text is to provide a general overview of the Canadian International Merchandise Trade Program, with special reference to concepts and definitions.
Conceptual framework
1. Objectives and coverage: The primary objective of the Canadian International Merchandise Trade Program is to measure the change in the stock of material resources of Canada resulting from the movement of merchandise into or out of the country. Information on imports and exports are inputs into the System of National Accounts, particularly in the Balance of Payments and Gross Domestic Product, and are used in the formulation of trade and budgetary policies. Governments, importers, exporters, manufacturers and shipping companies use international merchandise trade statistics to:
- monitor import penetration and export performance;
- monitor commodity price and volume changes; and
- examine transport implications.
2. Trade statistics (Customs basis / Balance of Payments basis): Merchandise trade statistics are reported and presented on two different bases: Customs basis and Balance of Payment basis.
When goods are imported into or exported from Canada, declarations must be filed with the Canada Border Service Agency (CBSA), giving such information as description and value of the goods, origin and port of clearance of commodities and mode of transport. Most of this information is required for the purposes of Customs administration. Statistics developed from administrative records of Customs are commonly referred to as Customs-based trade statistics.
Customs-based export statistics may understate or incorrectly portray the destination of exports. Exports are incorrectly portrayed when the country of final destination is inaccurately reported on the Customs documentation. This occurs most frequently when goods are routed through an intermediary country before continuing on to their final destination.
Statistics Canada does not have a direct measure of undercoverage, however a monthly estimated adjustment is included within Balance of Payments-based data.
On January 1, 1990, Canada entered into a memorandum of understanding with the United States concerning the exchange of import data. As a consequence, each administration is using the other's import data to replace its own export data. Canada's international merchandise trade statistics are, therefore, not derived exclusively from the administrative records of the Canada Border Services Agency, but from United States Customs records as well.
Customs-based information is adjusted to conform to the National Accounts concepts and definitions. The adjustments to derive Balance of Payments-based trade data include adjustments related to trade definition, valuation and timing. The principal difference between the two trade concepts is that Customs-based merchandise trade statistics cover the physical movement of goods as they are reflected in Customs documents while Balance of Payments-adjusted data are intended to cover all economic transactions that involve merchandise trade between residents and non-residents.
3. System of trade: Canadian trade statistics are compiled according to the general system of trade, as defined by the United Nations Statistical Office. Under this system, imports include all goods that have crossed Canada's territorial boundary, whether for immediate consumption in Canada or for storage in bonded Customs warehouses. Domestic exports include goods grown, extracted or manufactured in Canada, including goods of foreign origin that have been materially transformed in Canada. Re-exports are exports of goods of foreign origin that have not been materially transformed in Canada, including foreign goods withdrawn for export from bonded Customs warehouses. Total exports are the sum of domestic exports and re-exports. Thus the general trade system, in principle, presents all goods entering the country (imports) and all goods leaving the country (exports). It differs from the special system of trade in the treatment of imported goods into bonded Customs warehouses. Conceptually, under the general system, the statistical frontier coincides with the geographical boundary.
4. Valuation: For Customs purposes, imports are recorded at values established according to the provisions of the Customs Act, which, since January 1, 1985, reflects valuation methods based on the General Agreement on Tariffs and Trade (GATT) Valuation Code System. In general, the value for duty of imported goods must be equivalent to the transaction value or the price actually paid.
The transaction value of imported goods includes all transportation and associated costs incurred up to the point of direct shipment to Canada. Therefore, Canada's imports are valued Free on Board (FOB), place of direct shipment to Canada. It excludes freight and insurance costs in bringing the goods to Canada from the point of direct shipment.
For countries other than the United States, exports are recorded at the value declared on export documents, which usually reflect the transaction value (i.e., actual selling price or, in the case of a non-arm's length transaction, the transfer price used for company accounting purposes). Canada's exports to overseas countries are valued at FOB port of exit, including domestic freight charges to that point but net of discounts and allowances. As of January, 1990, Canada's exports to the U.S. are valued FOB point of exit from Canada. Prior to 1990, they were valued FOB place of lading net of freight charges, discounts and allowances.
5. Statistical period: The closing of the statistical month for imports and exports is defined as the last calendar day of the month based on the date of clearance from Customs. Documents received too late for incorporation in the current month are assigned to the month the transaction took place and are published the following statistical month.
6. Trading partner attribution (country of origin/destination): Exports are attributed to the country that is the last known destination of the goods at the time of export. Exports to the United States are attributed to the state of destination.
On a custom basis, imports are attributed to their country of origin, that is, the country in which the goods were grown, extracted or manufactured in accordance to the rules of origin administered by the Canada Border Services Agency. On a balance of payments basis, imports are attributed to the country of export instead of the country of origin to reflect the change in ownership of the goods (with no adjustment for exports). Imports from the United States are attributed to the state of origin.
7. Principal Trading Partners (PTPs): The list of PTPs is based on their annual share of total trade-merchandise imports and exports-with Canada in 2012. The countries included in the list of PTPs are the following:
List of Canada's Principal Trading Partners
- United States
- European Union
- Germany
- Netherlands
- France
- Italy
- Belgium
- Spain
- China
- United Kingdom
- Mexico
- Japan
- South Korea
- Hong Kong
- Brazil
- Algeria
- Norway
- India
- Switzerland
- Saudi Arabia
- Turkey
- Taiwan
- Peru
- Australia
- Iraq
- Indonesia
- Singapore
- Russian Federation
8. Free Trade Agreements: The list of free trade agreements is based on the list of Canada's Trade and Investment Agreements available on Global Affairs Canada's website. Please note that this list includes countries or groups of countries with which Canada is discussing or negotiating an agreement; in these cases, the agreements are not yet in force. Therefore, only a subset of the free trade agreements listed below are currently in force in Canada. More information about Canada's free trade agreements, including the member countries for each group and the status of the agreements, can be found at Global Affairs Canada's website.
The countries included in each free trade agreement are as follows:
| Name | Country |
|---|---|
| Canada-ASEAN Free Trade Agreement | Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Viet Nam |
| Canada-Caribbean Community Trade Agreement | Antigua and Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago |
| Canada-Chile Free Trade Agreement | Chile |
| Canada-China Free Trade Agreement | China |
| Canada-Colombia Free Trade Agreement | Colombia |
| Canada-Costa Rica Free Trade Agreement | Costa Rica |
| Canada-Dominican Republic Free Trade Agreement | Dominican Republic |
| Canada-European Free Trade Association (EFTA) Free Trade Agreement | Iceland, Liechtenstein, Norway, Switzerland |
| Canada-European Union: Comprehensive Economic and Trade Agreement (CETA) | Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden |
| Canada-Guatemala, Nicaragua and El Salvador Free Trade Agreement | El Salvador, Guatemala, Nicaragua |
| Canada-Honduras Free Trade Agreement | Honduras |
| Canada-India Comprehensive Economic Partnership Agreement | India |
| Canada-Israel Free Trade Agreement (CIFTA) | Israel |
| Canada-Japan Economic Partnership Agreement | Japan |
| Canada-Jordan Free Trade Agreement | Jordan |
| Canada-Korea Free Trade Agreement (CKFTA) | South Korea |
| Canada-Mercosur Free Trade Agreement | Argentina, Brazil, Paraguay, Uruguay |
| Canada-Morocco Free Trade Agreement | Morocco |
| Canada-Pacific Alliance Free Trade Agreement | Chile, Colombia, Mexico, Peru |
| Canada-Panama Free Trade Agreement | Panama |
| Canada-Peru Free Trade Agreement | Peru |
| Canada-Philippines Free Trade Agreement | Philippines |
| Canada-Singapore Free Trade Agreement | Singapore |
| Canada-Thailand Free Trade Agreement | Thailand |
| Canada-Turkey Free Trade Agreement | Turkey |
| Canada-U.S. Free Trade Agreement (CUSFTA) | United States of America |
| Canada-Ukraine Free Trade Agreement (CUFTA) | Ukraine |
| Canada-United States-Mexico Agreement (CUSMA) | Mexico, United States of America |
| Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) | Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Viet Nam |
| North American Free Trade Agreement (NAFTA) | Mexico, United States of America |
| Trans-Pacific Partnership (TPP) | Australia, Brunei Darussalam, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States of America, Viet Nam |
| Canada-United Kingdom Trade Continuity Agreement | United Kingdom |
9. Legal framework: Import and export statistics with countries other than the United States are derived from information contained in administrative records collected by the Canada Border Services Agency under the Customs Act. Copies of these documents (or information therefrom) are sent to Statistics Canada in accordance with Section 25 of the Statistics Act. It follows that the disclosure of trade statistics is governed by both the Customs Act and the Statistics Act and is subject to the provisions of Section 17(2)(a) of the latter. Disclosure of export statistics to the United States is governed by a memorandum of understanding that provides for the exchange of detailed import statistics between Canada and the United States.
Contact information
Telephone: 1-800-263-1136
Facsimile: 1-877-287-4369
Internet: infostats@statcan.gc.ca