The following is excerpted from the 11 August 2010 edition of “thestar.com”

Canada’s trade deficit almost doubled in June as exports collapsed, adding significant new drag to the country’s slowing economic recovery.

The trade report released Wednesday, coupled with a similarly weak reading south of the border, suggests the recovery in North America has entered a critical stage after a strong rebound earlier in the year.

“It’s just unfortunate that suddenly we are getting a whirlwind of reports that just a few weeks ago were looking strong, suddenly giving back that strength,” said economist Douglas Porter of BMO Capital Markets...

Porter said he has dropped his forecast for second-quarter growth in Canada from 2.7 per cent to 2.3 per cent, well below the Bank of Canada’s estimate of three per cent and about one-third the pace of advance seen in the first three months of 2010.

Statistics Canada said exports fell 2.5 per cent in June, while imports dropped 1.2 per cent.

That left the country with a $1.1-billion trade deficit for the month, deeper than June’s $695-million shortfall, which in itself had been revised upwards from the previously reported $503 million.

Exports declined to $33.5 billion from $34.4 billion as prices contracted by 1.2 per cent and volumes decreased by 1.3. Industrial goods and materials accounted for two-thirds of the decline, followed by energy products and automotive products.

The news was, if anything, worse in the United States, which given a weak domestic economy has been counting on exports to keep its recovery on life-support.

The U.S. trade deficit ballooned 19 per cent to $49.9 billion in June, far more than anticipated and the highest since October 2008...

Economists held out some hope that July will bring better results, particularly in Canada, where the auto sector appears to have had a good month.

Porter said the odds of a double-dip recession in the U.S., which would likely also sideswipe Canada’s recovery, had grown to more than one in five.

The details of the Canadian trade numbers offered little solace, other than that they came off a stronger May result.

Exports to the United States decreased one per cent, reflecting the weakness in exports of energy products, while imports rose 0.8 per cent. As a result, Canada’s trade surplus with the United States narrowed to $3 billion in June from $3.4 billion in May.

Exports to countries other than the United States fell seven per cent, largely a result of declining exports to the European Union. The fall in exports outpaced a 4.6 per cent decrease in imports.

Consequently, Canada’s trade deficit with countries other than the United States rose to $4.2 billion in June from $4.1 billion in May.

The key gain was in exports of machinery and equipment, which improved by 3.7 per cent.