COVID-19 and global value chains: an analysis based on exposure to imported specified intermediate goods in Canada

Released: 2022-07-21

The COVID-19 shock has illustrated the risks associated with an interdependent global trade when supply sources are concentrated. Dependence on imported intermediate goods has led to disruptions in global value chains (GVCs) that propagated through several countries.

The study "Measuring exposure and disruptions caused by the COVID-19 pandemic to global value chains: An analysis based on imported specified intermediate goods in Canada" is now available. This study builds on the Broad Economic Categories (BEC) classification to analyze Canada's exposure to specified intermediate goods (SIGs) imported from 2019 to 2021, a type of goods highly associated with global value chains.

The ratio of imported SIGs to total Canadian imports is used to measure Canada's participation in imports global value chains. This ratio declined from a steady level of about 26% of all imports prior to the pandemic to a ratio of 23.5% in 2021.

Various measures of exposure to SIGs imports from top country sources are also analyzed to shed light on how this exposure evolved during the pandemic and how Canada adjusted to possible disruptions in GVCs. By major trading partners, the exposure to imported SIGs from the US, Mexico, Japan and UK all declined from 2019 to 2021, while it increased for Asian countries, such as China, India, South Korea, and Taiwan.

However, there are nuances to interpretation at the broad economic category and product level on a country basis. For example, when the BEC of Transport equipment and travel services is excluded, an industry particularly important for North American trade, exposure to imported SIGs from the US increased slightly from 2019 to 2021.

The pandemic period translated into higher and more diversified exposures to imports of electronic-integrated circuits and processors from Asian countries, notably Taiwan, China, South Korea and Vietnam, and lower exposure to these products from the US.

The exposure to SIGs imports from the US was the largest in both 2019 and 2021 at the country level. This suggests that, in the context of imports GVCs, Canada relies primarily on US suppliers and complements with suppliers from other countries depending on the category. However, when comparing 2019 with 2021 at the BEC category and product levels, changes in exposure observed were not all in favour of the US.

Products

The document "Measuring exposure and disruptions caused by the COVID-19 pandemic to global value chains: An analysis based on imported specified intermediate goods in Canada," which is part of Latest Developments in the Canadian Economic Accounts (Catalogue number13-605-X), is now available.

Contact information

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