Human Geography Vancouver, British Columbia,

Human Geography

Vancouver, British Columbia, host of the recent Winter Olympics, may have a burgeoning tourism industry but the historic driver of the city's growth has been trade. The city was founded as a sawmill town and the province's economy has long been driven by resource industries. This paper will analyze the development of Vancouver's trade economy and present evidence that this economy continues to strengthen, showing no evidence of agglomeration diseconomy yet.

Trade in the region was based on the ease of shipping in the protected waterways, the abundance of natural resources, the willingness of native tribes to trade and the number of different colonial powers operating in the area (English, Russians, Spanish & Americans). The city of Vancouver developed as a major trade center because of a confluence of three strong influences. The first was the development of a transportation infrastructure. This was shaped primarily by geography. Vancouver has a deep natural harbor that is at the entrance to a fjord and is protected from the open ocean by islands. It also sits at the western edge of the North American continent, making it a natural terminus for the cross-Canada railroad and later the Trans-Canada Highway. In addition, its position north of the 49th parallel allowed for trade to develop here as part of the new nation of Canada, rather than have the city take a secondary position in the region to Seattle.

The second major influence is the abundance of natural resources in the vast but sparsely populated province of British Columbia. The province in general has developed agglomeration economies in forestry and mining. These economies were based on resource extraction in the interior of the province, with management and trade headquartered in Vancouver.

The third major influence was that, as a Pacific Rim city, Vancouver has long had a strong Asian population. Chinese laborers were imported to help build the cross-Canada railroad and by the time the Chinese Republic was established, trade links had already been forged, to the point where Sun Yat-Sen visited the city. Over time, the influence of Asia on the city has only increased. Vancouver became a hub for immigration from the Punjab and for refugees from Vietnam and pre-takeover Hong Kong. This has increased the trade links between the city and Asia over the past several decades, leading to resurgence in Vancouver's economy.

Having the people in place has made a considerable different, but the geographic location, directly across the Pacific from northern Asia's manufacturing centers, has facilitated the emergence of the trade agglomeration in Vancouver over the second half of the 20th century. The city now acts as a gateway for goods coming to North America, because of its transportation links to the rest of Canada and its proximity to the United States.

2. There is evidence that trade firms are clustered. These firms are located primarily the critical trade loci -- customs clearance and shipping firms at the airport, around the ports, downtown and near the U.S. border. However, in today's world physical location is not strong evidence of agglomeration in trade, as office tasks in particular can be conducted anywhere in the region (Port of Vancouver, 2008). The best evidence of a trade agglomeration is found in the data. The Port of Vancouver alone contributes $7.9 billion in GDP and $17.1 billion in economic output, and over 100,000 jobs to the region. This amounts to around 8% of the city's GDP and around 9% of the province's total employment.

Trade through the Port of Vancouver -- that is to say not including air, truck and train transport -- amounted to 127.8 billion metric tons in 2007 worth $75 billion. Vancouver is the largest port on the west coast of the Americas, despite the city being well down on the list of most populated Pacific Coast centers. Trade throughput provides greater insight than mere raw numbers. Vancouver handles 25% of new cars coming into Canada, a total of 458 shipments in 2007, despite not having any automobile manufacturing and only having 6% of the nation's population.

In addition to direct port activities, the trade business is comprised of a wide variety of other companies. These include but are not limited to cargo terminals, cruise ship terminals, tugboats, shipping agents, government and administrative agencies, freight forwarders, suppliers, builders, trucking firms, legal agents, warehouses, and importer/distributors (Port Metro Vancouver, 2010). These firms are scattered around the region geographically, but they are all interconnected.

The interconnectedness of firms in this industry can be seen through the ways in which they interact and support one another. In the export markets, the trade industry supports the resource extraction industries that are the backbone of the regional economy. Goods coming into port are cleared through customs by brokers, and shipped to the rest of Canada and to the U.S. via trucks and trains. For any given set of goods passing through the port, multiple companies are involved in the shipping or in the processing of the paperwork relating to the shipments. The government also becomes involved on several fronts, from trade promotion to customs to the management of the main ports (border, airport and sea port), creating more jobs. The economy becomes self-sustaining because trade brings people from around the world together. In this situation in particular, trade with Asia and the west coast of the United States brings improved exposure to Vancouver, thereby resulting in two-way trade markets. While other West Coast ports such as Los Angeles are heavily oriented towards importation, Vancouver's trade business works strongly in both directions, the sign of a sustainable, integrated trade center.

3. At present, there is little evidence of agglomeration diseconomies with regards to the trade industry in Vancouver. There are, however, some potential problems that can arise from the further development of trade in the area. Historically, trade worked in concert with resource extraction industries in order to foster broader economic development. However, those industries have been essentially left behind by trade in terms of their contribution to the city's economy. As a result, trade has come to dominate what was once a symbiotic relationship. Two significant, negative, externalities could potentially result from this.

One is that government policy could shift in favor of trade, at the expense of resource-based industries. This could involve levels of government spending to support the different industries as well as seeing the government focus on promoting non-resource trade. Should this occur, the formerly symbiotic relationship between the trade industry and the resource industries could collapse. This is the second potential negative externality. This would upend the nature of the Vancouver economy, and without the steady revenue streams from resource shipments, the trade industry could ultimately suffer if replacements for resource-based trade do not develop as quickly as intended.