A former diplomat, Colin Robertson is vice-president of the Canadian Global Affairs Institute.
Trade diversification – meaning looking beyond the U.S. and China – should be the top priority for the new minority Trudeau government.
Selling the Canadian brand and our goods and services requires effort at every level of government. Success will generate jobs and income, build trust and bolster national unity.
Seventy-five per cent of our exports go to the United States. We receive about 18 per cent of their exports, meaning that we rely more on the U.S. than they rely on us. It’s a dependence that U.S. President Donald Trump exploits. We don’t get the world price for our oil and gas because without pipelines to tidewater, we really only have one buyer. Passage of the new North American free trade agreement won’t change this over-dependence. NAFTA gives us a partial shield, but U.S. protectionism is as old as the Republic. And Mr. Trump loves tariffs.
China is lifting the curbs on our beef and pork exports. It’s a good start for new ambassador Dominic Barton, but it likely had as much to do with the Chinese government’s need to make up the shortfall caused by Asian swine flu. Our canola remains embargoed, and the detention of the two Michaels and China’s human-rights record have significantly soured Canadian attitudes toward China, according to recent polling by Pew Research Center and the University of British Columbia.
For both Chinese President Xi Jinping and Mr. Trump, trade is a geopolitical weapon based on a “reciprocity” that will always tilt in their favour. Canada needs to look at other markets. We should start by better utilizing our free-trade partnerships.
We have bilateral deals with countries such as South Korea and Israel, as well as big multilateral deals – the Comprehensive and Progressive Trans Pacific Partnership and the Comprehensive Economic and Trade Agreement with the European Union – negotiated by both the Harper and Trudeau governments with deep provincial involvement. This should make it easier for Mr. Trudeau to persuade Opposition Leader Andrew Scheer and the provincial premiers to participate in what needs to be regular visits to our free-trade partners.
Official visits are especially important in the Asian market to open doors and close deals. In the past, minority governments went years without seeing ministers. This leaves an impression of inconsistency and uncertainty about what the next change in government means. Liberals and Conservatives agree on the importance of trade. So do provincial premiers, regardless of their political stripe.
The leaders’ first visit should start in Tokyo, with side trips to Seoul and Ho Chi Minh City, and then to Brussels, with side trips to London, Paris and Berlin. It will deliver a message that Canadians are united when it comes to open trade and investment. Mr. Trudeau also needs to re-visit Delhi with Alberta Premier Jason Kenney and Saskatchewan’s Scott Moe to market our agri-food, including canola, and smart-energy technology.
Canadians are blessed. We have abundant resources and a diverse, well-educated work force constantly renewed through smart immigration. Our trade commissioner service is good and we’re improving our export financing services.
But Canada is falling behind in global competitiveness. We have a poor record in utilizing our trade deals. We continue to slip down the ladder, according to the World Economic Forum’s competitiveness index.
Once in the top 10, Canada is now ranked 14th, burdened by too much red tape (we rank 38th), a complicated legal system (we rank 24th) and a tax system needing reform (we rank 45th). Our transportation infrastructure needs work (we rank 32nd).
A recent Brookings report concluded that our advanced industries lag significantly behind those of the U.S. Nor is it just a matter of keeping up with Uncle Sam. It’s keeping up with the rest of the world. We claim to be open for business, but as the Public Policy Forum points out, foreign investment has grown by just 2 per cent a year, compared with the Organisation for Economic Co-operation and Development average of 7 per cent.
Canada can compete, but we need our political leaders working together, not bickering. Advancing shared trade goals is the place to begin.