Goldy Hyder is the president and CEO of Hill+Knowlton Strategies Canada.
As the global financial and business elite head to Davos, they'll carry with them a belief that it's now harder for governments to strike a balance between international trade and national trends. Voters have lost faith in globalization, and they've elected leaders who share their doubts.
This past year proved that no country is immune from the virulent strain of protectionism that has infected some of the world's largest economies. With political leaders susceptible to feverish nationalism, multinationalism should now be entrusted to business leaders.
This is not to suggest that business leaders are better trade negotiators than government officials. Trade deals among countries are not the same as business deals among companies, and private-sector experience doesn't always "trump" public-sector expertise in this regard.
Still, while trade and investment agreements may be negotiated by governments, they are negotiated for businesses, and any concessions secured at the negotiating table are ultimately for the benefit of companies and consumers.
Even the economic benefits that result from free trade and investment – such as rising employment, incomes and tax revenues – are indicators of corporate growth, including increased hiring, raises and corporate profits. Trade is really a private-sector, not public-sector, issue.
Nevertheless, governments have historically negotiated trade and investment deals because implementation requires amending laws, removing tariffs or changing rules and regulations – but businesses are now working around those obstacles with innovative corporate structures.
As General Electric's then-chief executive Jeffrey Immelt told New York University's Stern School of Business in 2016, "In the face of a protectionist global environment, companies must navigate the world on their own … we must level the playing field without government engagement."
Mr. Immelt's solution was "localization," having operations in those countries where you want to do business.
This, then, is what postgovernment globalization looks like – CEOs prioritizing markets and setting up shop in-country to avoid both tariff and non-tariff barriers. If their goods and services don't cross national borders, trade agreements are much less relevant.
In this move from geopolitics to CEO-politics, countries should shift their focus from multilateral negotiations with trading partners to unilateral actions that help them compete for the attention of CEOs.
By default and by design, in the era of CEO-politics, Canada finds itself perfectly positioned to seize "first-mover advantage" – ironically, a term most often used with trade agreements. The North American free-trade agreement, the Trans-Pacific Partnership and Brexit are in flux. Free trade with China and India are on hold.
If Canada embraces this new CEO-political reality, we can better insulate ourselves from other protectionist shocks. To do so, we must use every tool available to attract foreign business – lower corporate taxes, open our doors to talent and promote investment. We must also consider bold and aggressive ideas that will garner international attention and allow us to become a bigger magnet for large foreign companies that, given the size of our economy, would otherwise not think of Canada as a natural base of operations.
One idea comes from the Business Council of Canada, which is calling for the elimination of all import tariffs.
A research study published by the council suggests that eliminating import tariffs – combined with an open policy for skilled services and foreign direct investment – could increase Canada's annual GDP, in real terms, by as much as 1.7 per cent.
Even if Canada retained tariffs in strategic areas such as supply management, a tariff-free model would lower the cost of manufacturing inputs and benefit a range of sectors, including metals, automotive, machinery, petrochemicals and forest products.
Whether Canada adopts this proposal or others, we must accept that globalization is evolving. We can't control what governments do in Beijing, Delhi, Tokyo, London or Washington. All we can do is control our decisions, our direction and our destiny.