Canada has a problem. Especially so in relation to decreasing trade with the United States.
Since Trump decided to unilaterally tear up CUSMA, the three country trade agreement, and NAFTA before it, and then impose illegal tariffs, Canada’s export market has seen large increases in costs that not only lower profit, but essentially mean that, for some industries, the costs are prohibitive.
Mark Carney, has declared that the old relationship with the U.S., is over. I agree. We should never have relied on the United States, for obvious reasons, but now that the relationship is indeed at an end, diversification requires Canadian businesses and industry to rethink its previous protectionism, both internally and externally, which is stalling diversification.
Not only do Canadian provinces still hold onto their trade restrictions with other provinces, although there has been some positive movements with respect to the issue, but internationally, Canada is still overprotective of some industries, the dairy industry being but one example.
Canada has an opportunity, a window of time, through which to seek new trade agreements in emerging markets, where the population growth is such that demand greatly exceeds their national ability to provide for their people.
India, Pakistan, Nigeria, Brazil, Indonesia and the DRC (Congo) are all nations with substantive growth. Canadian exports, whether raw materials or refined products are in great demand around the world. It isn’t even pricing of these commodities that is problematic, it is access.
Free trade, which Canada espouses to believe in, is damaged by Canada’s internal protectionist sentiments. Yes, there are some specific, rational reasons for some to those protectionist tariffs, particularly in relation to essential products like dairy, cheeses, etc., where due to economy of scale those industries could, and would likely be overwhelmed by massive companies dumping on the market to drive competition out of the market.
But, protectionism creates protectionism in return. And while the WTO, the ITO and GATT have agreed that protections for essential commodities or products in Canada are accepted, rational and reasonable, other nations see those as unjustified and prohibitive.
Canada may be required, irrespective of the costs to specific protected industries, allow international companies and industries to enter the Canadian market without any protectionist tariffs or taxes on those products, if in turn, Canada wants to truly expand into what up to now have been essentially closed markets.
Balance and collaboration through diplomacy, combined with intelligent discourse and a willingness to adjust expectations and seek incrementalism, may be the order of the day.
Now that Canada’s relationship with America is essential finished, Canada needs to diversify as quickly as possible and for industries to accept that in the future, America cannot be trusted.
It’s time to remove Canada from the United States sphere of influence.
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