PERSPECTIVE: Successive Canadian Governments’ Efforts to Increase Non-U.S. Trade Have Had Limited Effect Over Past 25 Years

The current Canadian government has made diversification away from trade with the United States—and particularly Canadian exports to the United States—a national priority and has announced and implemented various initiatives reflecting this priority.
In fact, over the past 50 years, prior Canadian governments have periodically prioritized reducing dependence on the US market for Canadian exports and implemented several initiatives to do so, including trade agreements with other trading partners.
While the share of merchandise exports going to non-US markets increased from 1999 to 2011, it leveled off through 2024.
Canada has been less dependent on the US market for services exports than for Canadian merchandise exports, and the share of services exports going to countries other than the United States increased fairly consistently from 1999 to 2024.
The most prominent recipient of Canada’s non-US exports was China, which is consistent with China’s rapid economic growth during the period from 1999 to 2024.
The key finding is that Canada’s trade dependence on the United States weakened only modestly over an extended period during which Canadian governments have tried to diversify trade away from the US, and geographical distribution of trade flows between Canada and its trade partners—including the US—is relatively “sticky”.
This suggests that Canada will face significant challenges in reducing its export dependence on the United States going forward.

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