No sooner has Prime Minister Stephen Harper returned from a controversial trip to Israel than a group of Canadian business executives is heading to the other side of the Middle East political divide in the hope of opening trade and investment doors in some potentially lucrative markets.
Starting Saturday, representatives from 10 Canadian companies will be travelling to Iraq, Jordan and Turkey on a trade mission organized by the Canada-Arab Business Council (CABC) and the Canadian-Turkish Business Council.
This is the first organized Canadian trade mission to Iraq, said Sandra LeBlanc, president of CABC, which is based in Ottawa. The timing is good, Ms. LeBlanc said, since it coincides with the opening of two Canadian government trade offices – one in Baghdad and one in Erbil, capital of the Kurdistan region of northern Iraq.
The launch of the trade offices comes on the heels of Canada opening a diplomatic mission in Baghdad last April. Bessma Momani, associate professor in the department of political science at the University of Waterloo, said these offices could be helpful in supporting Canadian companies that want to do business in Iraq as well as Iraqi businesses interested in trade and investment opportunities in Canada.
Canada's imports from Iraq are dominated by oil and amounted to around $4-billion in 2012, according to the Department of Foreign Affairs, Trade and Development. Canadian exports consist primarily of wheat and totalled almost $400-million in 2012. Total trade with Iraq jumped from around $2.6-billion in 2011 to $4.4-billion in 2012.
According to Ms. LeBlanc, there are "huge opportunities" for Canadian businesses in the energy sector and infrastructure in Iraq. The government of Iraq is looking to upgrade its pipeline infrastructure and export terminals and asked for support from Canada's oil and gas sector during a meeting in Alberta in 2013.
A number of Canadian companies, such as Western Zagros, Talisman Energy and ShaMaran Petroleum, are already present in Kurdistan, a region rich in oil and gas and considered to be much safer than the rest of the country. Talisman is among the companies that will join the trade mission.
Friction with Iraq's central government has complicated Kurdistan's oil exports. Baghdad has threatened the authorities in Erbil with sanctions if the autonomous region tries to export oil through Turkey without coming to an agreement with the government in Baghdad.
Canada's ambassador to Iraq and Jordan, Bruno Saccomani, told Falah Mustafa, head of foreign relations for the Kurdistan Regional Government, at a meeting last Saturday that Ottawa sees great potential for Kurdistan, according to Iraq Business News' website.
The opening of trade offices in both Baghdad and Erbil is "smart diplomacy," said Dr. Momani, and signals that Canada is determined not to miss out on commercial opportunities in Iraq.
Canadian companies are also present outside Kurdistan, such as Sonoro Energy, based in Calgary, which will also be joining the trade mission.
Energy will be the focus in Jordan too, where the government is seeking foreign expertise to help boost shale oil exports in an effort to achieve energy security. The country, which sits on the world's fourth-largest shale oil reserves, signed an agreement with Canadian Global Oil Shale Holdings in September, 2012, to assess oil shale resources. across 86 square miles of the Attarat Um Ghudran and Isphere al-Mahatain regions of southern Jordan.
Jordan is the first Arab country to sign a free-trade agreement with Canada. The deal, which took effect in October, 2012, provides for the elimination of tariffs on Canadian exports of forestry, agricultural and agri-food products and machinery to Jordan.
Canadian exports to Jordan stood at about $115-million in 2012 and consisted mainly of aircraft and lumber, while imports of $20-million consisted mainly of textiles. Like Iraq, total trade significantly increased between 2011 and 2012, from around $90-million to around $135-million.
Turkey is different from the other two countries, because it is an oil importer, Ms. LeBlanc said. But it needs "innovative engineering as well as financing solutions" to support infrastructure development plans for the next 10 years, valued at approximately $400-billion, according to CABC's website. Inmet Mining Corp., Quantec Geoscience and Sherwood Innovations are among the members of the Canadian-Turkish Business Council.
Canadian investments in Turkey were valued at about $909-million in 2012 and Export Development Canada has identified the country as a strategic market for Canadian firms. According to EDC's website, "niche opportunities exist for Canadian investors, particularly in the energy, information and communication technologies, mining, education and infrastructure sectors."
Dr. Momani says Canadian firms doing business in the Middle East have the advantage of a positive image and are well respected. This could give them an edge in high-potential sectors such as construction, engineering, health care, agri-business and education.
But the government needs to be more proactive, she said. EDC has a smaller presence and is more timid in the Middle East than American chambers of commerce, for instance. "In the Middle East, the local business community usually knows about the U.S. Chamber of Commerce or the British Council," Dr. Momani added, noting this kind of public diplomacy helps boost business ties.