In Press: Sunghun Lim research team studies trade effect of bridge blockades
By: Norman Martin
Sunghun Lim, an expert in global agricultural value chains within Texas Tech's Department of Agricultural & Applied Economics, and a University of Guelph co-author were featured in a detailed article focusing on, “What the Ambassador Bridge and other blockades mean for Canada-U.S. Trade.” Here's part of the takeaway.
Recently, trade between Canada and the United States was hampered for almost a week by the blockade of the Ambassador Bridge at the Windsor-Detroit border. The bridge accounts for nearly 30 percent of annual trade between Canada and the U.S., amounting to a trade value of $323 million daily.
A research study by Sunghun Lim, an assistant professor with in Texas Tech's Department of Agricultural & Applied Economics, and Sylvanus Kwaku Afesorgbor, an assistant professor with the University of Guelph's Department of Food, Agricultural & Resource Economics, found that geographically, border blockades likely have a bigger impact on U.S. farming states with economies that are highly dependent on exporting to Canada, including North Dakota, Michigan, Ohio, Oregon, South Dakota and Montana.
Similarly, Canadian provinces such as Prince Edward Island, Manitoba and Saskatchewan that are somewhat more dependent on primary or non-processed agri-food products, including grains, will also suffer heavily from border blockades.
“Rising inflation in Canada and the U.S., triggered mostly by COVID-19 and climate change disruptions to supply chains, makes border blockades a major concern,” Lim said. “If not addressed speedily, blockades will cause food prices to soar even higher given the rise in general inflation is already expected to significantly impact food prices.”
The U.S. and Canada have established the most enduring and lucrative trade partnership in the world. As of 2019, Canada was the largest export destination of American goods and the third-largest supplier of imported goods in the U.S. Among all other traded goods, agricultural and food trade is of great importance.
Canada is the second-largest U.S. agricultural export market, importing up to $22.1 billion amount goods in 2020. The perishable nature of agri-food products makes any delay at borders costly to farmers and businesses. The bridge blockade disproportionately affected agricultural products compared to non-agricultural products.
The researchers stressed that the automobile industry across the U.S. and Canada bore the brunt of the Ambassador Bridge issue as major producers such as Toyota, Ford and General Motors closed down production plants. The auto industry sector in Canada and the U.S. is highly dependent on the North American supply chain in which different auto parts are produced across borders.
CONTACT: Phillip Johnson, chairman and director of the Thornton Agricultural Finance Institute, Department of Agricultural and Applied Economics, Texas Tech University at (806) 834-0474 or firstname.lastname@example.org
0215NM22 / Editor's Note: For the full text version of the University of Guelph's news item, please click here
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Editor: Norman Martin
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