We all have a favourite statistic about why trade is important to Canada. My favourite is that Canada represents 0.5% of world population and 2.6% of world trade. The difference between the two numbers is our high standard of living. Another way to say it is that we make twice as much as we can buy. Not geographically, but in terms of market, we're a small industrialized country, and we need global markets to succeed.
Although I'm no longer responsible for the rest of trade policy--just the India negotiations--the U.S. market is the context for the India negotiations as well. It's clear that in Canada job one in trade is still the United States. It still represents something like 72% of our merchandise trade, but less than 10 years ago it was 87%. The number I cite is the share of our exports. The number is in decline and continues to fall. That's due to a number of things. Our dollar has strengthened and has made us a little less competitive, and other countries have become more competitive in the American market.
So the happy news is that the share that's represented by new markets is also growing. But our trade in the U.S. is flat in real terms. Even though it is still job one in Canadian trade policy, that's why job two, which is diversification of markets, is more and more important all the time. Canadian business made this decision in 2005-06, when the numbers began to shift fairly dramatically. For the best exposé on the numbers, I would recommend Peter Hall, the chief economist at Export Development Canada, who can provide some very interesting numbers and analysis with respect to how Canadian business is diversifying markets.
The job I'm part of is the diversification of markets. It's job two, but it's pretty important.