The United States has always been Canada's No. 1 trading partner, so there's no surprise that executives are nearly unanimous in feeling that it should be Canada's top priority in opening up two-way trade and investment.
The sentiment is bolstered by a prevailing sense of the United States' improving economic strength and perceived resurgent growth prospects, as well as its proximity to Canada.
This situation dovetails with initiatives by a number of Canadian exporters to capitalize on long-standing trade relationships by establishing, or re-establishing, U.S. operations. But C-Suite executives need to go further in developing a trade strategy around increasing exports and diversifying markets beyond the United States.
China and India have emerging middle-class consumers that represent a significant component of global consumer growth. China is expected to overtake the United States in 2026 in nominal gross domestic product in U.S. dollar terms, with India moving to third place, according to the latest long-term forecasts of the Economist Intelligence Unit. Canada should be taking advantage of that opportunity).
While the European Union and China remain behind the United States on the list of top trade priorities for the C-Suite, the numbers have shifted over the past two years. The EU is now second and China third.
Sentiment favouring EU trade has grown by 19 per cent since 2013 and 1 per cent over the past year, reflecting an overall diversification of Canadian markets for trade, export and foreign investment. This may be owing to the slowdown in U.S. trade in the past few years, a moderate amount of recent EU growth, and the focus generated by the negotiation of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU.
Indeed, many have stated that CETA, once ratified, could be one our best trade deals ever. At the same time, we're seeing a decline in executives who see China as a priority trade partner, with support slipping 25 per cent over the past two years and 15 per cent from last year.
A key issue in continuing trade talks has been farming quotas, something most C-suite survey respondents oppose. Indeed, 54 per cent are against Canada's "continuation of supply management." At first glance, this reflects the split between those helped by supply arrangements and those who believe such policies restrict the principles of free trade. Regardless, trade in agricultural products and the agrifood industry remains a focus in Canada.
Over all, it is clear from this survey that Canadian executives strongly support trade and recognize that successful trade management and oversight is tied to business and economic performance. It's likely that the United States will continue to be our largest and most valued trading partner for decades to come but it is imperative that Canada also diversify its trade relations.
Willy Kruh is global chairman of consumer markets and head of high-growth markets at KPMG Canada.