The Canada-Alaska connection: neighbors helping neighbors.

• Author: Wolf, Greg
• Position: WORLD TRADE CENTER SPECIAL SECTION

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Alaska's relationship with its next-door neighbor, Canada, is one of the state's most important international partnerships. Approximately 1,500 miles of common border and many shared interests, including significant commercial and cultural ties, drive this long-standing, multi-faceted connection. There is extensive cross-border trade and, in recent years, Alaskans and Canadians have teamed up to pursue a variety of business ventures and to jointly promote tourism.

Canada's involvement with Alaska's economy is significant and takes place on a number of levels. Canada is a major trading partner of Alaska, and Canadian firms have made substantial investments in the state. In addition, Canadians themselves travel to the state in large numbers and several Canadian port cities play a key role in Alaska's growing cruise ship industry. These investments and business activity support an estimated 8,000 direct and indirect jobs across the state, according to a newly updated report by the McDowell Group that details Canada's impact on Alaska's economy.

Trailing only Japan and South Korea, Canada has traditionally been the state's third-largest export market. Two years ago, it fell to the fourth position as Alaska's trade with a rapidly developing China propelled that country into the third position. In 2006, shipments from Alaska to Canada reached a record $445 million, a dramatic 100 percent increase over the previous year. This represents 11 percent of the state's total worldwide commodity exports.

BACK AND FORTH

The increase was fueled primarily by the higher prices received for mineral exports rather than a substantial increase in the quantities shipped. Last year, minerals accounted for 72 percent of the state's exports to Canada. Seafood, at 15 percent, and energy products at 4 percent, were the other two major export categories. The trade flows both directions: in 2006, according to Government of Canada statistics, Canadian firms shipped goods worth $437 million to Alaska. The two largest categories were refined fuel products at 18 percent, and mining and oil/gas field machinery at 9 percent of the total.

Canadian companies are not only customers of Alaskan resource exports, they are, in many cases, investors in the very projects that produce the exports, whether they are destined for Canada or other markets around the world. Alaska's mining industry, in particular, has attracted considerable Canadian participation...