Bring­ing North Amer­ica into the Asia/pa­cific Trade Min­is­ter Teresa Wat Says Canada Now Look­ing West Not South for Mar­kets

CAIFU - - Leader Spotlight - By Alan Forsythe

The­new U.S. Pres­i­dent, Don­ald Trump, has ef­fec­tively backed the U.S out of the Trans Pa­cific Trade Part­ner­ship (TPP). Trade Min­is­ter for Bri­tish Columbia, Teresa Wat, com­ments on what that might mean for Canada’s Pa­cific prov­ince.

“The U. S.’s de­ci­sion to for­mally with­draw from the TPP is dis­ap­point­ing, but not a sur­prise.

The TPP would have been good for B.C. – it would have helped us open up mar­kets, trade. But we're where we have al­ways been, which is a world with­out TPP.”

Go­ing for­ward Wat says B. C. and Canada could, and should make their own free trade agree­ments with Pa­cific Rim part­ners.

“We need to work hard as Cana­di­ans to forge free trade agree­ments with China and In­dia, the world's fastest-grow­ing econ­omy right now. B.C.

is a trad­ing prov­ince, and our jobs are cre­ated by more ac­cess to mar­kets, so we’ll con­tinue to find a way.

“B. C. no longer re­lies on the U. S. when it comes to trade, es­pe­cially in the lum­ber in­dus­try. We've grown our trade with China in lum­ber by over 1,000 per­cent. Fifty per­cent of our trade bal­ance for many months, doesn't go south of the border any­more.”

In po­si­tion­ing Canada, and B. C. in par­tic­u­lar, to­wards Asian trade will re­quire greater di­ver­si­fi­ca­tion.

“There has been too much fo­cus on U.S. and Europe in Canada. Ge­o­graph­i­cal lo­ca­tion here (B.C.) is dif­fer­ent from rest of Canada; we’re part of the Asian/pa­cific Rim, while at the same time part of the Amer­i­can con­ti­nent.

“Like any in­vest­ment strat­egy you can’t put all your eggs in one bas­ket. So, we’ve pur­sued a dif­fer­ent ex­port strat­egy. More than a decade ago we started to work on di­ver­si­fy­ing the econ­omy. We know we can’t be too de­pen­dent on oil and gas. So, we’ve been look­ing at pro­mot­ing tech­nol­ogy. That’s why we do bet­ter than the rest of the coun­try. In the next few years B.C. will lead the coun­try in eco­nomic growth.”

Canada as a coun­try ex­ported $ 36 bil­lion in goods and ser­vices in 2015 (most re­cent year with com­plete data). B. C. was re­spon­si­ble for about $ 6 bil­lion of that to­tal. About 80 per­cent of to­tal Cana­dian exports go to the U.S., but for B. C. it’s just 60 per­cent, Min­is­ter Wat ad­mits. Ob­vi­ously that’s still a large pro­por­tion of the to­tal, but con­sid­er­ing that B. C. shares a border with the dom­i­nant global econ­omy, 60 per­cent does point to some suc­cess in di­ver­si­fy­ing mar­kets. But, lack of free trade agree­ments could hin­der growth.

“We opened up the China mar­ket ten years ago. When U. S. con­struc­tion came to a halt in 2009, the China mar­ket saved our lum­ber mar­ket from col­laps­ing.

“I’ve pushed for a free trade agree­ment with China. Aus­tralia, which is sim­i­lar to Canada, has an agree­ment with China, so there’s prece­dent there. For China to have an agree­ment

with a North Amer­i­can coun­try is an im­por­tant step for them, I think they’re ready for that. So, I hope we can push that along, hope­fully in five years, not ten.”

In the mean­time, Wat notes, B. C. will be mov­ing ahead in ar­eas of trade where it has ju­ris­dic­tion. “We are push­ing select agri­cul­ture prod­ucts free trade agree­ments. This might have some in­flu­ence on the fed­eral gov­ern­ment, but in ab­sence of TPP we will con­tinue with select prod­uct free trade.”

China, is of course the largest mar­ket in the Asia/pa­cific, but the en­tire re­gion is ex­pe­ri­enc­ing growth that, while down, is greater than the EU or the U.S., and most an­a­lysts have no ex­pec­ta­tion that growth ra­tios will change.

ASEAN: In­done­sia, Malaysia, The Philip­pines, Sin­ga­pore, Brunei, Cam­bo­dia, Laos, Burma and Viet­nam, says Min­is­ter Wat, will col­lec­tively be­come the largest econ­omy in the world, led by In­done­sia.

“We took trade mis­sions there and con­cluded we should open a trade com­mis­sion there. We now have an of­fice in Jakarta, which is the hub of ASEAN. Also, we have an of­fice in Manila, as they are the third largest im­mi­grant group in B. C. ( af­ter Chi­nese and In­dian). That helps trade, we work with lo­cal en­trepreneurs to help ex­port to the Philip­pines. Next year we will open an of­fice in Malaysia. With their in­ter­est in B. C. LNG in­vest­ment Malaysia is a pri­or­ity right now.”

The 2010 Olympics helped raise Van­cou­ver’s pro­file, but capital is still thin on the ground, as Wat notes.

“The chal­lenge in the tech­nol­ogy in­dus­try here, is we have many start- ups, and once they come to A round fund­ing, we don’t have a lot of capital, so mainly that comes from U.S. VCS. Even­tu­ally they want those com­pa­nies to move south, and as a re­sult we lose tal­ent. I pro­posed some gov­ern­ment fund­ing for start-ups, and last year we an­nounced $ 100 mil­lion tech­nol­ogy fund. Which, we think, will at­tract more Asian in­vest­ment here, as they of­ten pre­fer some gov­ern­ment in­volve­ment in new ven­tures.”

"...last year we an­nounced $100 mil­lion tech­nol­ogy fund. Which, we think, will at­tract more Asian in­vest­ment here, as they of­ten pre­fer some gov­ern­ment in­volve­ment in new ven­tures."

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