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Although Canada was a committed member of the western alliance and publically supported Washington, DC's efforts to isolate communist China, Ottawa embarked on large-scale wheat sales to Beijing in the late 1950s in the face of sustained US opposition. Drawing on a broad range of archival records, this paper explores the three main factors that encouraged the Canadian government in this course: growing doubts about the wisdom of isolating communist China; mounting anger at Washington, DC'S use of subsidized wheat sales to capture traditional Canadian markets; and a surging sense of Canadian nationalism that sought a distinct role for Canada on the world stage. Clearly, as was so often the case in postwar Canadian foreign economic policy, a narrowly defined national interest easily trumped the ideological pressures of western solidarity. [ABSTRACT FROM AUTHOR]

Purpose - The paper's aim is to analyze changes in the relative importance of Canada as a supplier for its home markets; and, the rising importance of China versus other Canadian trading partners. Design/methodology/approach The market overlap measure (MOM) statistic, developed by Sawchuk and Yerger is used to analyze the Canadian home market shares for Canada and every other nation with sales in the Canadian market for each of 61 different NAIC sectors (56 at the four-digit NAIC level and five at the three-digit NAIC level). Findings The USA remains the most important foreign supplier to Canadian markets with a weighted average 23.6 percent market share as of 2003 (Canadian-based production having a 63.0 percent market share), US market share, however, has been declining by nearly a percentage point per year since 2000. Approximately, half of the lost US' market share has been captured by Canadian-based firms and approximateIy a quarter has been captured by Chinese production. China's growth in Canadian market share places it second behind only the USA in terms of Canadian-based farms' home market competitive exposure. Research limitations/implications - The work does not include an analysis of service sector trade flows due to inadequate data. Practical implications The MOM statistic is shown to be a useful diagnostic tool for analyzing the level of, trends in, and industries driving the competitive exposure a nation's firms have on sales in a specified market. Originality/value The MOM statistic is shown to yield better insights regarding the actual degree of competitive exposure than does the more commonly used similarity indices such as Finger-Kreinen. [ABSTRACT FROM AUTHOR]