Although Canada calls itself a trading nation, it is apparent that a multitude of factors limits the country’s participation in global imports and exports. One of the causes of Canada’s inefficiency in the development of global trading relationships is the government’s failure to cooperate with the private sector. On the one hand, Canadian institutions have been rather efficient at facilitating international trade agreements, which created a legitimate and clear framework for the country’s corporations to conduct business. Since the United States is essentially the most important trading partner of Canada, the creation of the North American Free Trade Agreement (NAFTA) could be considered a success (Office of the United States Trade Representative, 2019). NAFTA provides Canadian exporters with access to lucrative markets of the U.S. and Mexico, protects investors, as well as secures the best prices for Canadian consumers. As a result, Canada’s economy has become more productive, which is directly attributed to the existing trade relationship with the United States.
Despite the benefits of trade with the U.S., there are numerous issues related to Canada’s growing dependence on a single market. The government fails to engage with the private sector in order to develop trade relationships beyond the United States. This is exceptionally important because of the increasing influence of Asian markets, with China, in particular, continuing to rise in the arena of international import and export.
The Canadian government has developed some initiatives to facilitate trade integration and invest in business-supporting environments. Thus, with the goal of promoting Canadian global economic growth, the country’s Internal Development Agency initiated a number of private-public partnerships (P3s) in an effort to foster long-term economic advancements (Global Affairs Canada, 2019). However, P3s remain rather inefficient at engaging the private and public sectors together over a shared goal of global business development. Instead, such partnerships focus on social and community initiatives. Sweden and Denmark, on the other hand, use private-public projects to optimize supply chains, facilitate effective management of buyer-seller relationships, and to experiment with innovative economic frameworks by sharing a part of risks with private corporations. Thus, while Canada is committed to the U.S. trade relationship and social initiatives, other countries recognize the changes in the global business environment and develop mutually beneficial relationships with the private sector (Global Affairs Canada, 2019). Evidently, Canada falls behind others in terms of combining public and private efforts. Despite that, the country has immense potential to support non-governmental institutions for export promotion and utilize digitalization to cooperate with multinational corporations.
The Canadian government provides the private sector with a seemingly large amount of various resources for the development of trade and international business. Authorities report that they initiate projects that foster partnerships in foreign markets and support Canadian non-governmental organizations, which participate in research and development collaborations globally (Government of Canada, 2020). Additionally, officials claim they recognize the private sector’s need for international business development initiatives, which is why they distribute funding to national industry associations (Government of Canada, 2020). However, despite all of the aforementioned resources the Canadian government offers, it is important to recognize their integration does not correlate with the private sector’s primary needs. Evidently, it struggles from the lack of governmental support of small and medium-sized enterprises. Instead, the country’s authorities favor large, monopolistic corporations. They prioritize industry giants in the automotive and resource-based industries. Moreover, there is a growing need for the private sector “to seek paths to economic growth beyond the U.S.,” according to CBC (McGregor, 2018, para. 4). Tensions between the United States and China put Canada in a precarious and rather difficult position.
As a result of the past over-dependency on the American market, the relationship between the Canadian government and China is strained. Canada’s officials have to consider the trade and business development opportunities the Chinese market could provide. As of now, it is apparent that the private sector receives no support in growing globally outside the U.S. Small and medium-sized enterprises suffer the most since the government offers either limited resources or none at all.
The attitudes of the Canadian government and their focus on the North American markets were mentioned earlier. Additionally, due to recent developments, the country’s authorities now regard Europe as a source of unexplored business opportunities under the condition that the private sector will be able to optimize existing EU trade flows (Cision, 2018). However, in order to gain an in-depth understanding of the perceptions shaping Canadians’ views on global trade and business development, it is crucial to look at the recent academic studies and mass media coverage. As for the private sector, Cision (2018) reported mostly optimistic attitudes towards international trade displayed by Canadian businesses. The news source added that “more than eight in 10 (82%) surveyed understand their organization would lose its competitive advantage of barriers to international trade increased” (Cision, 2018, para. 2). Most importantly, Canada’s private sector was committed to developing close partnerships with institutions and corporations in Asian markets in order to respond to a rapidly changing global business environment. Despite the government’s focus on the U.S. and Europe, most enterprises consider China and India the global markets with the most growth potential.
Policy Options Politiques took a slightly different approach and examined the attitudes of the Canadian public regarding global trade. Acquaviva, Hamel Barker, and Wolfe (2018) report that the perceptions of international trade have been getting more positive over the past two decades in Canada. It is important to note that Canadians often associated the development of trade relationships with globalization, which is a controversial topic. Therefore, some Canadians reject economic self-interest and oppose their country’s engagement with Asian markets (Acquaviva et al., 2018). According to Acquaviva et al. (2018), trade attitudes of the majority of Canadians “are significantly influenced by the specific trade partners or agreements” (para. 22). Thus, it is evident that the attitudes of the private sector seem to differ from those of the government and the public, which contributes to the issues in Canadian trade identified earlier.
There are various stakeholders, who participate in a Summit, including government representatives specializing in foreign affairs, authorities tasked with protecting the interests of small businesses, international trade officials, as well as corporate executives. The first recommendation that might come out from the Summit is the development of government initiatives for supporting the private sector and engaging it in accomplishing the goal of international business development. This is extremely important as the private sector’s needs are often ignored by Canadian authorities, which leads to decreased private sector involvement in the government’s global commercial agenda. The second recommendation might be to shift the concentration of trade flows from the United States to Latin America, China, and India. The government has to recognize that depending on the U.S. as the primary market puts the Canadian economy at risk and limits the country’s ability to utilize a variety of business development opportunities in growing economies. The last recommendation, which might be suggested at the Summit, is to start negotiations regarding tariff and non-tariff barriers with existing trade partners. Thus, Canada can maximize the partnerships it already has to benefit its companies conducting business abroad.
References
Global Affairs Canada. (2019). Canada’s state of trade 2019 (20th ed.). Web.
Government of Canada (2020). Funding and support programs for doing international business. Web.
McGregor, J. (2018). NAFTA talks forced Canada to pick a side in U.S.-China trade war. CBC. Web.
Office of the United States Trade Representative. (2019). Western hemisphere: Canada. Web.