Ottawa’s renewed push for trade diversification is a necessary defence against Donald Trump GlobeBusiness
This translation has been automatically generated and has not been verified for accuracy.Prime Minister Justin Trudeau meets with US President Donald Trump in the Oval Office of the White House in Washington, DC on Monday, Feb. 13, 2017. The norm-shattering presidency of Mr. Trump has transformed the idea of trade diversification from an objective to an imperative.Eric Miller is president of Rideau Potomac Strategy Group and a fellow at the Canadian Global Affairs Institute.
Yet, the norm-shattering presidency of Mr. Trump, with its NAFTA renegotiation, national security proclamations about Canadian steel, aluminum and uranium, and repeated verbal broadsides, has transformed the idea of trade diversification from an objective to an imperative.The goal announced in the fall of 2018 was backed up with substantial new funding.
Greater trade diversification does not necessarily mean less trade with the United States. It just means more trade with everyone else.While their models differ in specifics, Japan, South Korea and Germany have driven substantial trade growth over a long period of time, including among smaller firms, by de-risking the exporting process.
Next, the government organizes financing for identified projects through the Japanese International Co-operation Agency – Tokyo’s key development assistance mechanism. As master project agreements are developed, the Japanese government and private sector organize consortiums of larger and smaller Japanese companies to deliver them.
One can envision ways to “Canadianize” this methodology. The Canadian Commercial Corp. or EDC could serve as the financing delivery vehicle. The large prime contractors to lead consortiums could be identified, at least initially, through a partnership with an entity such as the Business Council of Canada.
According to South Korea’s Institute for International Trade, these efforts drove a 15-per-cent jump in the number of exports using the European agreement over the first three years. If intermediate inputs are sent from Canada to Vietnam under CPTPP rules and are “substantially transformed” to meet the rules of origin and other technical requirements under, say, the ASEAN-China Agreement, the finished product can enter the Chinese market duty-free.
Fast-growing countries also have enormous technology needs. Given the networked nature of the tech economy, the Canadian Technology Accelerator program was launched in 2009 to help Canadian firms in existing tech centres, such as Silicon Valley. Activities range from providing mentorship and networking for senior executives to facilitating access to investors.
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