The importance attached to trade in the context of Canadian economic performance has grown in recent years, in part as a result of the free trade agreement with the United States and a new round of multilateral trade negotiations under the GATT. As a consequence, questions about the relative strength of Canadian exports on foreign markets and import penetration in Canada have become increasingly topical.

The World Trade Database (WTD), constructed by the International Trade Division of Statistics Canada, provides a rich data source for analysis of such questions. It reflects all international trade flows between members of the United Nations, broken down by partner country and commodity. The database on CD-ROM consists of annual data from 1980 covering some 170 countries trading with one another, and 600 commodities .

Because the concepts and definitions underlying the U.N. data are not rigorously adhered to, data are harmonized to conform to a standard classification system applying to all countries, commodities and industries. The classification system underlying the WTD for commodities is the Canadian version of the Standard International Trade Classification,

Because much of the data are not available at the most detailed level (5- digit), they have to be aggregated to ensure comparability between trading partners. Therefore the 4- digit (or sub- group) level of the Standard International Trade Classification, Revision 2 (SITC Rev. 2) serves as the basic level of comparison. Countries using the 5 digit classification tend to do so in accordance with their own statistical needs. For example, a country may not have enough trade in a particular commodity to justify giving it a separate code. Instead, that commodity may be combined with a similar product and classified to a different category.

Since different countries use different levels of commodity detail, it is possible that a country's exports by country may not agree, after being adjusted, with its exports by commodity. To correct this problem, the commodity" data are aggregated at the 3- digit instead of the 4- digit level. Although this sacrifices detail, it does ensure that no matter how the country's different trading partners classify them, all goods are captured under the same generic SITC category. The adjusted figures are then prorated by commodity. Continuing the example cited above, Argentina's total adjusted exports by country are divided by the adjusted figure for all Argentinean exports by commodity. This ratio is then multiplied by the adjusted export figure for calf leather.

To adjust trade between partners reporting at different levels of commodity detail, the commodity distribution reported by the partner country showing the greatest detail, in this case, Italy, is applied to the exports of the other country. For example, Italy's imports of calf leather from Hungary are divided by its total imports of leather from Hungary, and this ratio is applied to Hungary's exports of "leather" (the SITC category at the 2- digit level).

When there is an "entrepôt surplus" (i.e. when the exporter's figures are greater than those of the importer), it is reallocated by means of a procedure similar to the one used to reallocate exports to unspecified countries in a region. First, a group of countries is selected to which an "entrepôt surplus" should be distributed, then the amount of the surplus to be allocated to each country in the group is calculated.

As well as being allocated to individual countries, trade can be assigned to regional areas or more general categories: "Areas n.e.s.", "Not Specified", "Free Zones", "For Ships" and "Special Categories". After unspecified exports to regions have been reallocated, the exports reported under the five general categories are added and redistributed to all countries individually. If, however, reported exports exceed reported imports, the excess is put into a single category called "Countries n.e.s.

However, where exports are less than imports, the shortfall in reported exports to "unspecified" trading partners is reallocated in line with imports reported by the importing countries. For example, if total imports of Argentinean calf leather by E.E.C. members exceed Argentina's reported exports, exports are reallocated from "E.E.C. n.e.s." to E.E.C. members.

Detailed differences in commodity classification

The comparability of the U.N. data is improved by identifying these anonymous trading partners and reallocating the exporter's trade to them. In the example above, Argentina's calf leather exports to "E.E.C. n.e.s." are apportioned to each of the E.E.C.'s member countries eligible to receive them. A similar approach is taken with respect to imports.

Differences in trading partner attribution

Many countries report a portion of their trade as being with regions or aggregated groups of countries rather than with specific trading partners. For example, Argentina's exports of calf leather may be recorded as destined for "E.E.C. n.e.s." ("not elsewhere specified"), rather than to a specific E.E.C. member (or members) . In other cases, a product may be recorded as

Some common words found in the essay are:
United Nations, Argentina Attempts, United Unspecified, USSR Greece, Europe/Mediterranean Americas, SITC Rev, East German, Hungary Hungary's, Adjustments UN, XCC SITC, calf leather, reporting countries, trading partners, non- reporting, non- reporting countries, digit level, united nations, import figures, countries region, adjusted exports, export figures, 4- digit level, trade non- reporting, reporting non- reporting, calf leather exports,
Approximate Word count = 6386
Approximate Pages = 26 (250 words per page double spaced)