Is it Time for Canada to Find New Trading Partners?

October 30, 2017

 

It is well-known that Canada’s largest trading partner is the United States. According to the Office of the United States Trade Representative, American imports into Canada in 2016 were valued at $320 billion USD and Canadian exports to the United States accounted for $307.6 billion USD. The U.S. accounted for up to 73.71% of Canada’ exports in 2012. Our second largest trading partner, the United Kingdom, does not even come close to topping the United States, accounting for a miniscule 4.2% of our exports. The humongous bilateral trade between America and Canada can be described as a Canadian trade reliance on America. The American government has shown, in the past, thankfulness for this trading relationship; the two countries along with Mexico signed the North American Free Trade Agreement in the 1990s, one of many accords signed between our two nations historically.

 

 

This so-far friendly relationship has been put into doubt with the election of the divisive US President Donald Trump. A stark populist and American nationalist, Trump has been a controversial figure leading up to and during his current presidency, proposing a renegotiation of NAFTA, and even threatening to pull out of the agreement all together. Pulling out of NAFTA would mean that Canadian exports to America would be taxed, which would be detrimental to the Canadian economy. Trump has shown himself as being conservative in his trade policy, launching trade dispute with Canada over softwood lumber exports and imposing excessive tariffs on the Bombardier CSeries jets. All these instances of American hostility to Canadian exports brings us to the question, is it time for Canada to find newer, friendlier trading partners?

 

I believe the answer to that question is no. Many of our economic problems can be traced to an indifferent attitude that our government is showing. Our federal government has done nothing to mitigate these trade disputes. Trudeau has spent a large amount of taxpayer dollars on the expensive Bombardier CSeries jets. Boeing logged a complaint with the American Department of Commerce, which imposed a 295% tariff on the Canadian planes, claiming that Bombardier had sold its planes to Delta Airlines at a price significantly below market price with the help of federal and provincial subsidies, which amounts to dumping. You would think that Justin Trudeau would vehemently fight this claim and dispute, but the man has remained quiet on the subject. While Trudeau’s actions on the US-Canadian trade disputes leave something to be desired, his actions on international trade have not been much better. Mr Trudeau recently cancelled the Energy East pipeline. The pipeline would have brought Alberta bitumen cross-country to ports in Quebec and New Brunswick, where it would have been sold to foreign countries. It would have also stopped Eastern Canada’s reliance on imported foreign crude oil. The cancellation of the pipeline has had a ripple effect, eliminating tens of thousands of jobs that would have been created in the construction and maintenance of the pipeline. While the cancellation was a victory for environmentalists and Canadian aboriginals, the decision shows the world that Canada is not a safe country to invest in energy and that our nation is not concerned about international trade.

 

 

While Justin Trudeau has been taxing the so-called middle class that he has been so vehemently defending, he has shown himself to be a potential detriment to the Canadian economy, I believe that his government would have a much easier job trying to cooperate with the US Government. We already have well-established ties with the United States, and if Mr. Trudeau and the Liberals were to simply push back against the aggressive executive branch of the American Government, I believe that our bilateral relationship could be rebuilt to the pre-Trump era. Moreover, while my answer to the question on whether or not Canada needs to foster new foreign trading partners was no, I still believe that Canada should increase trade with other foreign countries like the European Union or the UK, as a trade dependency is not a sustainable position to be in.

 

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