Third, traditional data on international trade does not capture
the extent of integration in global supply chains. The iPhone
assembled in China and exported to the United States appears
simply as a Chinese export; but the significant value generated
by the U.S.-based design team may appear in no trade
statistics whatsoever. It follows that the measured flow of a
country’s exports of some products does not necessarily
correspond closely with the level of local economic activity
(production and employment) actually generated by those
products. Even in Canada’s resource sector, the domestic
content of exports is not 100 percent, although it is typically
more than 75 percent, meaning that up to one-quarter of the
value of the final exported product comes from imported
inputs. In most manufacturing industries, however, the
domestic content of exports is 50 percent or lower, and in the
automobile industry it is only 35 percent.
The presence of such highly integrated global supply chains
indicates the importance of two-way trade in the Canadian
economy: Access to low-price and high-quality imports is as
crucial to the Canadian economy as is our access to world
markets where we can sell our intermediate and final products.