Lost in all the angst of our current trade dispute with the United States and the push to diversify Canada's export partners is the fact that despite what were very favourable market access terms via free trade arrangement with the United States and the subsequent growth in our exports, our real per capita GDP performance has been moribund. Our only saving grace has been that we entered the period of decline in per capita GDP growth rates marking the last fifty years from an exceedingly high base. Figure 1 plots IMF-WEO data on per capita GDP in constant prices ($2021) for Canada and a select number of important important countries and trade partners. As hard as it might be to believe, in 1980, once adjusted for purchasing power parity, real per capita GDP in Canada was higher than the United States and the E.U.
If one then moves forward, what is remarkable is our performance against these - albeit cherry picked - comparison countries. Most of them are either important trade partners for Canada or have the potential to become more important (especially in the case of the E.U. and the UK) in the wake of the current trade dispute with the United States. Our real per capita GDP is still high by world standards in that we are well above China, India, South Africa, Mexico and Brazil, not to mention New Zealand and Japan. However, the U.K. and the E.U. have nearly caught up with us. Australia and the United States surpassed us some time ago. Our real per capita GDP has grown but just about everyone else has grown faster.
Figure 2 presents the ranked implied annual growth rate of the real per capita GDP numbers in Figure 1 and also includes those for the World economy as a whole. China and South Korea are the prime examples of the Asian miracle with annual growth rates since 1980 at 7.6 and 4.8 percent respectively. This has allowed per capita income in China to double nearly every ten years which is an impressive performance even if they are still at an average per capita GDP that is half of Canada's. South Korea started from a higher base than China but also has had a stellar performance with its per capita GDP doubling every 15 years since 1980 and at 98 percent of Canadian per capita GDP has essentially reached parity with us.
The world has developed rapidly since 1980 with the world per capita GDP growth rate being a bit below South Korea's and that has been driven by two of its largest economies - China and India. The United States and Australia and the U.K. in the end have seen their real per capita GDP expand by just under 2 percent annually while the E.U. and Japan are closer to 1.5 percent. Canada clocks in at 1.1 percent in terms of its annual implied annual growth rate - below New Zealand at 1.3 percent but above Brazil, Mexico and South Africa.
For all the talk about the E.U, as a sclerotic trade partner for Canada given its productivity issues, it has grown faster than Canada and its per capita GDP is also for all intents and purposes on par with Canada. These types of growth numbers should be a wake up call for Canada. We have only done as well as we have because of inertia and that cannot last for ever.