Canada’s Global Trade Options—Is There a Plan B?
This chapter argues that Canada’s trade diversification agenda provides Canadian traders with greater access and investment certainty in new markets but it cannot compensate for U.S. losses nor will distant markets ever fully replace less costly neighboring markets from an exporter perspective. While the NAFTA renegotiations and WTO shake-up are not taking place under circumstances Canada would have chosen, they should, nevertheless, deliver important reforms to a hidebound system. Meanwhile, the shocks to Canada’s trading system are shaking Canada out of a complacency built on a very comfortable U.S. trade relationship. In order to weather the short- and medium-term uncertainty, Canada will have to focus on leaner domestic economic policies including increased competitiveness and decreased costs for carbon levies, inter-provincial trade and permitting/regulatory waste. Externally, Canada will have to become more strategic in its trade relations with key trading partners: China, Mexico, UK, India and Japan.
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