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