Opinion: Canada needs a bold new international trade strategy. If not now when?

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Canadian Minister for International Trade Mary Ng arrives at the West Block on Parliament Hill in Ottawa on November 29, 2021.Sean Kilpatrick/The Canadian Press

Stewart Beck was responsible for Canada’s international business development, investment and innovation programs and is a former Canadian High Commissioner to India. He recently retired as President and CEO of the Asia Pacific Foundation of Canada.

Gary Comerford is President and CEO of CMC Global, a director on the board of directors of Novelis Inc. and a former managing director of the joint venture between Sun Life and Aditya Birla Group, one of Canada’s most successful business collaborations. and India.

The views and opinions expressed in this article are solely those of the authors.

What will be the new normal for international trade? The challenges facing Canada are enormous. The emergence of an even more protectionist America First fundamentally undermines the stability of Canada’s largest export market. Asia is the fastest growing economic region in the world today, but strategic neglect has let our country catch up. And with little to no economic or political leverage, Canada is scrambling to deal with a rising and aggressive China.

We are free trade advocates who have seen and believe in the benefits of open markets. It’s fair to say that Canada has done very well internationally, probably because it had to. With a population of just 38 million, Canada must look beyond its borders.

The natural target for expansion has been the United States. It’s right next door, has no geographic barrier, speaks the same language, and so far has demonstrated a willingness to view the Great White North as a kind of 51st state. But, boy, have things changed.

The collapse of the US manufacturing sector has revitalized and now institutionalized the protectionist America First mantra. Many American politicians have seized on this and armed an anti-free trade movement. Canada’s best trading partner has suddenly shifted to a transactional attitude, that is, what is best for me.

The cancellation of the Keystone pipeline extension and the protectionist measures of President Joe Biden’s Build Back Better program are just some of the latest signals warning Canada that it should not rely too heavily on its friend to the South.

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Canada’s approach to Asia has always been one-dimensional. In the 1980s and 1990s, the focus was on Japan, a consumer of our natural resources and a major investor, particularly in our automobile sector.

Since the beginning of the new millennium, Canada has focused on China. Air Canada planes were full of government officials and executives looking to invest in the next promised land and betting heavily on creating a free market relationship with China.

And how did it work? Yes, China has become our second largest export market – but it’s still tiny compared to our export dependence on the United States. Today’s geopolitical realities will also limit interest and support for economic engagement with the world’s future largest economy.

But Asia is a big place with many countries with large populations, young demographics and higher economic growth rates than ours. What is Canada doing to capitalize on its strengths and diversify its interests?

If there ever was a time for a well-articulated and cohesive international business strategy, it’s now. COVID-19 has made and will make things more difficult, but it is crucial to recognize the need for a new global business strategy that takes into account current and changing realities. Countries around the world are all recalibrating their trade strategies, and Canada must do the same!

It will be imperative to engage a new generation of business leaders – many of whom seek to build large-scale small and medium enterprises – in the development of global business strategy. They are best placed to identify superior opportunities and key markets for Canadian products and technologies, and advise governments on the policies needed at the federal and provincial levels to support and catalyze a global strategy.

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Take India, for example, a market we both know well. China’s economic fortunes have changed dramatically over the past 30 years, but so has India’s. Since 1991, India’s GDP has increased tenfold. Billions of dollars of investments have been made in infrastructure that has transformed the appearance of the country. Five hundred million people, through hard work and ingenuity, have lifted themselves out of poverty.

A nation that once limited the number of computers allowed in the country is now home to Tata Consultancy Services, the world’s largest software developer. TCS and other world-class companies are revolutionizing the technology people use every day. Every week a new unicorn is born in India.

Large Canadian corporations such as Brookfield Corporations, Fairfax Financial Holdings Ltd., Bombardier Inc., Sun Life Financial Inc., McCain Foods Ltd., Teck Resources Ltd. and CPP Investments are making significant investments in India. They do it only because they see superior opportunities. Canadian politicians talk about expanding trade relations with India, and speech after speech says all the right things.

But when you look at the actual numbers, Canada clearly hasn’t benefited significantly from the huge economic expansion taking place in the country. Trade with India is still a rounding error. Other countries have actively sought business opportunities with India and reaped significant benefits. Why has Canada not taken more advantage of this opportunity?

When developing a global business strategy, it is important to identify the key strengths we have to offer and then tailor the strategy to those strengths, depending on the market. Again, consider India. What does Canada have to offer and what does India need? As a rapidly developing country with a large population and a young population, India needs energy security, food security, investment for infrastructure development and education.

Canada’s domestic policies limit our ability to supply carbon-based energy products to India. But that doesn’t stop us from promoting and supporting advanced, renewable and sustainable technologies in areas such as hydrogen and hydrogen fuel cells, energy efficiency, solar energy and biofuels.

The same is true for food. Yes, we are India’s main supplier of pulses, but these are commodities, bought and sold through the global trading system. The way we support our pulse exporters is and should be different from the way we support companies that provide solutions in critical areas such as water – a scarce resource in India – or precision agriculture, that will increase efficiency and production for India’s 750 million people. who depend on agriculture for a living.

India cannot develop without investment. Canada is a world leader in investment and pension fund management. Our pension funds and other major investors, such as Brookfield and Fairfax, have recognized the opportunity and contributed to policy discussions that facilitate and encourage more investment in India. India sees Canada as a key partner in the area of ​​pensions. So what can we do to develop other opportunities in the financial services industry?

When 50% of your population is under the age of 25, education is a primary concern for the Indian government and parents. Canada has benefited immensely over the past 10 years from the talented pool of Indian students who have chosen Canada as their study destination. Many of these students have remained in Canada and contribute to our economic growth and our social fabric.

But many have also returned to India. Are we thinking strategically about how we can use these dynamic young professionals as a resource to promote our economic engagement with India?

Canada must develop and publish a bold new international commerce strategy that builds on our strengths, aligns with our national innovation policies, and is adaptable to the needs and demands of our trading partners. It will be important to involve the Canadian business community in the process and, once the strategy is developed, to provide the resources necessary for its implementation.

We took India as an example, and anyone who has tried to do business in India knows that it is not easy. But if you look at India today and tomorrow, the economic opportunities for Canada are immense. Now is the time to aggressively and strategically diversify our trade relationships, not only with India, but with other high-potential international markets.

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