Quote:
Originally posted by Platinum Rinaldo
Canada is not the US's largest trade allie... just so you know
We buy goods from Canada when we would save money purchasing them from elsewhere... Your lumber isn't cheaper you know...
why?
Because we want to support NAFTA and make it stronger.
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Just a couple items of note:
1) The Canadian/US trade relationship numbers are massively inflated. How so, you ask? Because those numbers measure only the value of the items crossing the border, not the ADDED VALUE of those items as they're being processed. Take this example:
- Canadian nickel from sudbury travels south to be turned into steel
- Those steel ingots come north to be forged into gears
- Those gears go back south to be placed into a transmission assembly
- That transmission goes north and gets installed into a new car, which is sold to a dealer south of the border
Looking at the 'value of trade', you can see that each stage only adds bits of incremental value, but the trade numbers report the full value of all parts irrespective of those increments. As a result, raw trade numbers are substantially overstated from the REAL trade numbers, which is part of the reason why I'm not quite as impressed as some when people mention it.
2) Apparently canadian lumber is cheaper... or at least, cheaper enough to be the source of constant NAFTA and WTO challenges by US logging firm lobbyists. Those challenges end up hurting other sectors (like house construction) and even the lumber industry (by causing issues with multinational logging corps that operate on both sides of the border e.g. Weyerhauser). I've still not decided whether they're launching all these challenges as a cynical ploy to gouge money from both us and the construction industry, or if they still genuinely consider canadian lumber subsidized even after 3 WTO ruling against them.