International trade is one of the hot industries of this age. We recently analyzed its first component, exportation and now we will look at its second part, importation. What are its advantages? Which countries import to Canada the most? And what are the Canadian import regulations?
What is it?
An import is any good or service brought in from one country to another country. Exportation and importation are the bases of international trade, and their difference is called balance of trade. There is no country that is self-sufficient and doesn’t require any goods or services to import. It is said that the only country that could be self-sufficient is Russia because it is so massive and has sufficient population, raw materials, and knowledge — but Russia also imports a lot. Why? Because importation has many advantages:
- Many countries depend on imports because they don’t produce enough goods to supply their population. In the US, the demand for oil is bigger than its supplies, so the country has to import.
- Domestic producers have to fight for their place in the market, so they have to improve quality, technologies, advertising, prices, et cetera. Importing maintains cost and business competitiveness.
- More products mean higher profits and an increase in sales.
- Some businesses depend on seasonal factors, so their profit fluctuates over the year. Importing to countries with opposite seasons allows the companies to gain stability and to stabilize fluctuations.
- Importing countries reduce their dependence on the domestic market. During a long economic recession in the home country, imports fill the hole in national supplies.
Importation Controls in Canada
The government organization that oversees import regulations is called The Canada Border Services Agency. Imports, as well as exports, require regulations for a variety of reasons: to regulate trade in military and strategic dual-use goods, to implement trade restrictions in support of Canada’s supply management programs, to obtain negotiated benefits from international agreements, to prevent the supply of military goods to countries that threaten national security, et cetera. Canada controls its import of textiles and clothing, agricultural and steel products, and weapons and munitions. Here is a step-by-step guide for importers.
The Canadian Association of Importers and Exporters (I.E. Canada)
I.E. Canada is a national, non-profit organization that provides services to develop the international trade and profitability of importers and exporters. It was formed after World War I by Canadian importers due to the difficulties they experienced from the fluctuations of the German exchange rates, high tariff barriers, and protectionism worldwide. Today, it gives importers and exporters access to the policy makers that affect their business, organizes educational events across Canada, and helps develop its member‘s businesses.
Importation in Canada
Canada imports machinery and equipment, motor vehicles and their parts, electronics, crude oil, chemicals, electricity, and durable consumer goods. Its most important import partners are the US (about 51%), China (11%), and Mexico (5%). The trade between the US, Mexico, and Canada is very brisk thanks to NAFTA (The North American Free Trade Agreement signed by these three countries). You can find the full list of importers here. Canada was the 10th largest importer in the world in 2010. The largest importer are the US. Canadian imports had a growing trend until the recession occurred. Since the end of 2009, importation has started to grow again, and today it reaches almost the same level as it did before the crisis.