Free Trade Agreements and the Evolution of Wholesale Sales in Canada

January 15, 2018

As 2017 marks the 150th anniversary of Confederation, we take a look back at an aspect of the history of wholesale sales in Canada.

Canada has a long trading history, which started before Confederation. Because wholesalers play an important role in the import and export of goods, free trade agreements have had a notable influence on the evolution of the wholesale sector.

From 1947 to 1989, Canada signed several free trade agreements through seven rounds of General Agreement on Tariffs and Trade (GATT) negotiations. The World Trade Organization replaced GATT in 1995. Wholesale sales grew steadily over this period, declining in only two years. During this time, its share of total gross domestic product (GDP) gradually edged upward, hovering at about the 5% mark toward the end of the period.

A new era began with the Canada-United States Trade Agreement (signed in 1987 and brought into force on January 1, 1989) and the North American Free Trade Agreement (NAFTA, 1994), where international trade in goods and services expanded sharply, and wholesale sales along with it. From 1989 to 2013, wholesalers assumed a larger role in the economy, pushing the sector’s share of GDP to as high as 5.9% (2006) and confirming its role as one of the most important industries in the Canadian economy.

Source: Statistics Canada, www.statcan.gc.ca/daily-quotidien/171218/dq171218d-eng.pdf

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