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About the data
About the data
Statistics Canada is the origin for Canada 's export and import data used in this paper. Similarly, data for the partner countries originate from the statistical agencies of the partner countries. The OECD compiled the particular dataset used here based on the Standard International Trade Classification (SITC, Revision 2).
Readers may want to note that the machinery component of the SITC category 'Machinery and transport equipment' differs in coverage from the 'machinery and equipment' data in sector 5 as published by Statistics Canada.
In particular, Statistics Canada's classification of machinery and equipment is more comprehensive than the SITC classification of the machinery component. For example, while SITC classifies professional, scientific and controlling instruments; measuring, checking, and analyzing instruments; and many similar instruments and equipment under the category 'Miscellaneous manufactured articles' - SITC category 8, Statistics Canada's classification includes these in machinery and equipment.
Despite the seeming undercoverage of the machinery component in the SITC classification, we use the classification in order to keep the data comparable with our trading partners.
Moreover, given that our main objective is to examine and identify the long-term trends in the share of machinery and transport equipment in total exports and imports, the use of SITC data is not expected to limit the analysis presented in this paper.
Product groups in machinery and transport equipment
The product groups used in this paper are formed using the Standard International Trade Classification, Revision 2, (SITC Rev 2) classification system. A brief description of the groups is given below.
The product group 'Road vehicles and their parts and accessories ' are formed from the SITC category 78 - road vehicles, including air cushion vehicles. The SITC sub-group 784 covers what is presented as 'Parts and accessories of road vehicles'.
'Industrial machinery' includes the following SITC categories:
The product group 'Computer and communications equipment' is formed by the following two SITC categories:
'Electrical machinery and apparatus' is formed by the SITC category 77 - Electrical machinery, apparatus, and appliances.
'Other transport equipment' represents the SITC category 79, and includes the following three product sub-groups:
Crude oil prices and shares of machinery and transport equipment
According to the WTO, real oil prices reached their highest level since 1985 in 2000. Between 1999 and 2000, crude oil prices in the world market increased by nearly 58% leading to a dramatic increase in the value of fuels traded internationally. This dwarfed the growth of all other product categories. In that time period, Canada 's total imports in the category of mineral fuels, lubricants, and related materials recorded close to 73% growth, and total exports recorded 80.5% growth.
Crude oil prices in the world market in 2001 averaged about 15% below their 2000 level. Prices started rising again in 2002 recording about 2% gain in 2002, 14.9% in 2003, and yet another 28.6% in 2004. The fast growth in crude oil prices inflates the nominal value of oil relative to other products.
One can obtain values of both exports and imports at constant 1997 prices using Standard International Trade Classification (SITC, Revision 3). Export and import price indexes are available for the period since 1997. At 1997 prices, the values of total exports, and exports of machinery and transport equipment in 2000 were $384.2 billion and $166.3 billion respectively. Similarly, total imports and imports of machinery and transport equipment were valued at $345.0 billion and $188.1 billion, respectively, at 1997 prices. Accordingly, the share of machinery and transport equipment in Canada 's total exports and total imports peaked at 43.3% and 54.5%, respectively, in 2000. Constant prices put the shares at 39.7% and 52.3%, respectively, in 2003. See Statistics Canada's CANSIM table 228-0040 for export and import prices.
The domination of automotive products
Canada 's trade in machinery and transport equipment is dominated by automotive products. Road vehicles and their parts and accessories accounted for about 56% of total exports and 39% of total imports in the category of machinery and transport equipment in 2003. The shares exhibited wide fluctuations over the period covered in this paper.
Thus, road vehicles accounted for 68.3% of total exports in the category of machinery and transport equipment in 1985, rising from a share of 54.9% in 1980.
Similarly, 50.2% of total imports in machinery and transport equipment in 1985 were auto-products, up from 39.3% in 1980. As mentioned before, between 1982 and 1986, both exports and imports of road vehicles including parts and accessories displayed steep growths above trends. Those above-trend growths were then reversed over the period 1987‑1991.
If one considers only the period from 1991 to 2003, the share of road vehicles and their parts and accessories averaged 57% of exports and 36% of imports in the category of machinery and transport equipment.