The purpose of this paper is to deconstruct the drivers of Canada's dried legumes exports over a decade through the shift share analysis (SSA). By algebraically isolating competitiveness from other plausible factors this paper argues that volatility being faced by Canada’s exporters is not the result of internal production inefficiency rather reflection of asymmetric market dependency and corresponding tariffs and non-tariff measures (NTMs) originating in partner countries.
This paper applies SSA to algebraically decompose Canada’s dried legumes export growth into four drivers. This further isolates Canada specific competitiveness with respect to each disaggregated category of dried legumes. The analysis uses multi-year trade data from ITC Trade Map, for gaining comparative insights across markets and disaggregating product categories. Subsequently, these results are seen on the backdrop of prevalent tariffs and NTMs.
The trajectory of Canada’s dried legume exports represents a blend of issues related to asymmetric dependency and diplomatic engagements. Canada depends on a limited trading partners for the export earnings more than the trading partners depend on Canada’s dried legumes for their food security. On the one hand, limited market diversification has led to increased vulnerability to NTMs and policy shocks. On the other hand, competing countries strengthened their presence, signaling the need for Canada to recalibrate its export strategies. Policymakers could aim for robust market diversification, value added processing and proactive bilateral engagements to ensure a smooth transition.
The novelty of the paper is threefold: First, through the lenses of SSA this paper algebraically isolates the root causes of export instability. Second, the study provides empirical evidence between arbitrary trade measures and the losses in competitiveness. Third, the results obtained help us to feed toward advancement of the theory of asymmetric interdependence at the granular commodity level. Thereby, the authors demonstrate that even an efficient, highly competitive producer (Canada) can still suffer severe export linked volatility due to reliance on a few concentrated buyers.
