A case of NAFTA-phobia

Canada can reasonably, profitably think about doing business elsewhere, except relying on America

Currently, Canadian media is filled with NAFTA stories and the threats from Trumpland. The writing of Thomas Walkom on Sept. 6 is in the right direction. He says that Donald Trump’s disdain will do a favour for Canada. I would say it would be a blessing in disguise. Last year when Trump was in his race for the presidency, his speeches contained anti-Canada expressions and threats driving Canadians to panic.

I wrote that we Canadians must get rid of this fear of the big brother neighbour and look for opportunities elsewhere, that the world is much bigger and open before us and there is much more space and people in the world outside the U.S., where Canada can reasonably and profitably think about doing business.

One of the most important items in abundance for our trade is Canadian timber. President Trump threatens to renegotiate the current deal with Canada, and we are afraid of losing profit or even trade. And in many other areas such threats exist. Mr. Trump may or may not change his mind. He is very inconsistent in most of his policy statements. However, it may not be wise to wait indefinitely for his policy to change in our favour.

Hence we need to start thinking fast and initiating action. When one door is closed against us, a hundred are still open. Just look around.

One advantage for Canada is that we have produce, products and technology available in abundance. The recent negotiations with the European Union are in the right direction. In addition to Europe we need to look to Asia, which is a larger market and population, greater than the North American and European continents combined. The added advantage is that the Asian markets are in need of most of the products we have for trading. The disadvantages include the distance and transportation cost. Secondly, labour there is cheaper when compared to Europe and North America. Cost of labour here makes our products more costly there. We cannot easily reduce the domestic cost of labour and we have also shortages in labour force. The alternative would be to look into exporting the products as raw material or semi-processed to be processed in the landing places either by establishing Canadian processing units there or leaving that work to overseas processors.

In trade and commerce there is a law that profit margin per unit will decrease while volume of profit will increase when there is increase in trade volume. In most of our agro products we have the volume and our handicap is shortage of labour. Industrial machinery available in the Asian markets is also less costly than they are here in Canada, which will also add to our profit margin if our trading organizations decide to do the processing work overseas.

The Middle Eastern and the Indian sub-continent are short of timber because they have clear cut their forests, which is an environmental issue leading to greater global warming. A good number of those countries rely for their timber on Africa and some parts of Southeast Asian countries, where timber and forest resources are harvested without regard for regeneration and sustainability.

Making available the rich timber resources of Canada to these markets will indirectly mitigate this great environmental hazard and will add to our trading partners. Our horticultural and dairy products are other items, which could be traded in that part of the world. Our industrial products, advanced technology and technical skill are other merchandise worth considering. Partnering with and importing from them environmentally sustainable energy devises and equipment’s will enhance the speed of our efforts to reduce global carbon emission problem.

Considering the belligerent attitude of the U.S., though Canada does not have an easy land route to Mexico, through the sea route it could look for greater trade partnership with Mexico, which too has a sizable population and trade requirements. I would say, without positively provoking the U.S., as it does to Canada, we can think about diversifying and expanding to newer markets and countries.