Bilateral Trade

Competence center for mining & mineral resources

Trends in Bilateral Trade Relations

Figure 1: Bilateral Trade Canada – Germany (Source: Statistics Canada 2015)

Figure 2: Foreign Trade between Canada and Germany in 2015 and basic trade information (Sources: Statistics Canada 2016 (http://www.statcan.gc.ca); World Economic Outlook Database – April 2015, Institutional Investor Credit Country Rating 2016 (100 high, 0 low); Corruption Perceptions Index 2016 – Transparency International (100 high, 0 low); The Mining Association of Canada – Facts & Figures 2015)

Germany is the largest economy in the European Union and the fourth largest in the world. Germany has a strong export orientation. Hence, exports to Canada have seen an increase over the past five years (~50%) while imports from Canada have been rather steady (see figure 1). In 2018, Germany was Canada’s eighth-largest export market whereas Germany ranked sixth among Canada’s suppliers.

Looking at the past 20 years, bilateral trade shows an overall growing trend: Canadian imports from Germany have more than tripled, from $6.08 billion in 1998 to $19.06 billion in 2018, while Canadian exports to Germany grew moderately from $2.71 billion in 1998 to $4.83 billion in 2018.

Popular goods imported from Germany included machinery (33%), vehicles, aircraft and transport equipment (28%), chemical products (16%), pharmaceutical products (8%) and data processing technology (6%). Most popular imports from Canada included machines (18%), mineral products (15%), vehicles (7%) and metals (2%) (see figure 2).

Foreign Direct Investment

With estimated assets of $17 billion in 2018, Germany ranks 8th in foreign direct investment (FDI) in Canada. Canadian firms, on the other hand, hold $10.5 billion in assets in Germany.

Many multinational German companies are represented in Canada, including Bayer, BASF, Siemens, Daimler, Dr. Oetker, Mannesmann and Thyssen-Krupp. Overall, a total of 1,500 German business representations – or respectively 800 German companies – are spread throughout the country, the majority of which, however, are SME’s (small-medium-sized enterprises). Mississauga in Ontario is home to more than 300 German businesses and is therefore called the “German business centre” by locals in Canada.

By the same token, more than 120 Canadian owned companies have holdings in Germany. Notable investors include Rio Tinto Alcan, Research in Motion, CAE Electronics, Bombardier, Pratt and Whitney, Trizec Hahn and Magna.

Canada – Resources Supplier for Germany

Canada is a resource producer of world rank (see figure 1 and also see Canada section for more information). In 2015, Canada ranked first for Potash and Cadmium production in the world, second for Niobium, and third for Nickel, Titanium, Cobalt, PGMs, and Aluminum as well as fourth for Tungsten. With the exception of Potash, what all these mineral resources have in common is that they are invaluable for Germany’s high-tech manufacturing sector.

Figure 2: Canadian share of German imports of selected mineral resources (DERA 2015)

Figure 2 shows that Canada already is an important partner for Germany with regards to the supply of natural resources and strategic metals and minerals. The chart also implies that Canada represents a great opportunity to further diversify resource supply sources to decrease supply risks for the German manufacturing sector.

Looking at trends in German imports for Canadian mineral products by value and volume (figures 3 and 4), it is worth noting that imports of precious metals and ferroniobium increased between 2012 and 2016, while imports of copper, silver, and cobalt decreased with respect to value as well as volume.

Another interesting observation from the charts below is that even though imports of titanium and nickel have decreased in value and volume, imports of value-added products (powder) for titanium as well as nickel have increased in the same period. This is also the case for Cobalt, which is now imported as refined product, whereas it was imported as ore and concentrate prior to 2014.

Other important value added mineral products which are imported from Canada but are not listed in the charts include for example products of nickel as alloys or ash, as well as diamonds, tungsten (powder) and iron products.

Figure 3: German imports of mineral products from Canada by value (DERA 2018)

Figure 4: German imports of mineral products from Canada by volume

With respect to ore and concentrate, it is notable that iron ore and coking coal imports reflect the significant price drop for these raw materials. While the import volume for coking coal remained stable, the value dropped by almost 50%. With respect to Iron Ore, the charts show that while the import volume increased, the overall value decreased, again reflecting a sharp decline in the iron ore price.

The decrease in import value for other commodities can be explained away with decreasing commodity prices since 2012. It is therefore recommended to overlay the volume and value charts to get a better understanding of the trends in bilateral trade relations.

Figure 5 and 6 show the trends in German imports of ore and concentrate from Canada. Data for precious metals are not available before 2013 and for Nickel before 2014.

Figure 5: German imports of ores and concentrate from Canada by value (DERA 2018)

Figure 6: German imports of ores and concentrate from Canada by amount (DERA 2018)

Important: Please note that most of the diagrams are in logarithmic scale!

canada-mine-wpBilateral Trade