Canada's Global Commerce Strategy 2.0: Implications of High Energy Prices

31 Pages Posted: 26 Dec 2012

See all articles by Dan Ciuriak

Dan Ciuriak

Ciuriak Consulting Inc.; Centre for International Governance Innovation (CIGI); C.D. Howe Institute; Asia Pacific Foundation of Canada; BKP Development Research & Consulting GmbH

John M. Curtis

Centre for International Governance Innovation (CIGI)

Date Written: December 26, 2012

Abstract

Higher energy prices, an inevitable consequence of the depletion of the least cost sources of fossil fuels, will not end globalization, but it will alter it. Trade declines with increased distance in part because of transportation costs, the more so the heavier the goods and the greater the fuel consumption of the transportation mode in which they move. Accordingly, the direction, composition and mode of trade will change over the next few decades as low cost oil reserves are depleted and replaced by higher-cost sources and the energy supply mix shifts towards forms that are better suited for some forms of transportation than for others. Export supply serving more distant markets will tend to be deflected to regional markets. Multinational corporations will reorganize to service more distant markets through foreign affiliates or licensing arrangements. Trade in intermediate goods and services will follow the shift in production base. The nature of traded goods (value-to-weight and carbon content) will affect their global market access. This paper reviews the implications of these developments for Canada’s Global Commerce Strategy 2.0.

Keywords: International trade, energy prices, transportation costs, Canada, Global Commerce Strategy

JEL Classification: F13, F14

Suggested Citation

Ciuriak, Dan and Curtis, John M., Canada's Global Commerce Strategy 2.0: Implications of High Energy Prices (December 26, 2012). Available at SSRN: https://ssrn.com/abstract=2193975 or http://dx.doi.org/10.2139/ssrn.2193975

Dan Ciuriak (Contact Author)

Ciuriak Consulting Inc. ( email )

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Ottawa, Ontario K1N 6H9
Canada

Centre for International Governance Innovation (CIGI) ( email )

57 Erb Street West
Waterloo, Ontario N2L 6C2
Canada

C.D. Howe Institute ( email )

67 Yonge St., Suite 300
Toronto, Ontario M5E 1J8
Canada

Asia Pacific Foundation of Canada ( email )

Canada

HOME PAGE: http://ciuriakconsulting.com/

BKP Development Research & Consulting GmbH ( email )

Romanstrasse 74
München, 80639
Germany

John M. Curtis

Centre for International Governance Innovation (CIGI) ( email )

57 Erb St. West
Waterloo, Ontario N2L 6C2
Canada

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