Outlook for Key Markets

United States (US)

Economic growth in the US following the 2008-09 recession has been slow, and in good part attributable to government spending. US gross domestic product (GDP) is expected to grow 2% in 2013, and accelerating thereafter.^{Footnote 7} Fiscal measures passed on the eve of the New Year, which are intended to address the structural fiscal deficit, may have an impact on consumer demand (i.e. expiry of the 2% payroll-tax cut, which will reduce the purchasing power of workers). In addition, further austerity measures will need to be reconsidered within two months by the US government, including spending cuts and other measures that could have a bearing on GDP growth. The US remains Canada's largest market for fish and seafood products, representing 61% ($2.2B) of total Canadian fish and seafood exports in 2012 (Jan.-Oct.). ^{Footnote 8} The US was Canada's largest export market for snow crab (74%), lobster (80%), and Atlantic cod (74%) in 2012.

Asia

China is Canada's second-largest fish and seafood export market overall, accounting for 11% of total fish and seafood exports in 2012 (Jan.-Oct.) for a value of $387M. ^{Footnote 9} Total Canadian exports to China are expected to grow rapidly in the coming decade as trade with China increases. ^{Footnote 10} The prospects for China in 2013 are marked by slower economic growth, political leadership changes ^{Footnote 11} and strained relations with its main fish and seafood trade partner, Japan. ^{Footnote 12} The International Monetary Fund (IMF) forecasts that real GDP of newly industrialized Asian economies ^{Footnote 13} will grow at an average rate of 3-4% during 2013-2017, while developing Asian countries (including China) ^{Footnote 14} will grow at an average of 7-8% over the same period.

Japan

Following the Tōhoku earthquake and tsunami in March 2011, significant infrastructure and property were destroyed in Japan. While disaster recovery spending helped to stimulate real GDP growth to 1.6% in 2012, growth is expected to fall to 0.7% in 2013. ^{Footnote 15} Japanese unemployment remains low compared to other advanced economies at 5% (second quarter, Q2 2012). Japan is Canada's third largest market for snow crab accounting for 9% of exports in 2012. Canada exported $233M of seafood products to Japan in 2012 (Jan.-Oct.) ^{Footnote 16}

European Union (EU)

The EU economy continues to worsen. In the third quarter (Q3) of 2012, unemployment in the Eurozone reached a record high of 11.6%. In addition, real GDP in the Eurozone ^{Footnote 17} is expected to decrease 0.4% in 2012, shrink by 0.1% in 2013, and return to a tepid growth of 1.3% in 2014. ^{Footnote 18} The OECD observes that the "main risk is a lack of sufficient progress by policy makers in resolving the crisis". Ratification of the Canada-EU Trade Agreement (CETA) could improve Canadian exports of seafood products, as tariffs charged by the EU on seafood imported from Canada would decline significantly. The average tariff charged on all Canadian exports of fish products to the EU is 11%, and the tariff rates for the major species considered in this report are 7-20%. ^{Footnote 19} Separately from CETA, the EU has introduced a tariff-free import quota for cooked and peeled Northern shrimp of 30,000 tonnes. ^{Footnote 20} The European Union represented 39% of Canadian shrimp exports and 7% of Canadian lobster exports in 2012. ^{Footnote 21} Canada exported $296M of seafood products to the EU in 2012 (Jan.-Oct.) ^{Footnote 22}