Unrecognized Aspect of Canadian Iron Ore Prospects Globalization and related free trade concepts may be well on the way to the road to non functionality, as China eats the worlds lunch with unbalanced trade. The time may come, when Canada installs a gonadically positve* government capable of telling China that you must buy an equal amount of Canadian product in dollars to the amount of Chinese products Canada buys every year.
I was unable to find a balance of payments table, to show current trade flows between China, Brazil, and Australia. Such a table would have been helpful in trying to illustrate to what degree increased Canadian iron ore purchases by China could help balance the current scenario. I cannot draw examples without the chart.
To postulate. If Australia has a negative balance of payments with China now, even though China is buying huge amounts of iron ore, Australia may have nothing more to sell if it seeks to demand balance of payment parity with China. If Canada has an imbalance of trade with China, the matter matter may be easily ameilorated if China buys more Canadian iron ore. Australia will have other options. It can rent maneating crocodiles to the Chinese on a royalty basis with a payment to Australia for every man each crocodile eats.
* Gonadically positve means there is no question whether they are there.
Canada Moose