Ex­ports and busi­ness in­vest­ment broad­en­ing: BoC deputy gov­er­nor

Truro Daily News - - CANADA -

A se­nior Bank of Canada of­fi­cial says the cen­tral bank is see­ing en­cour­ag­ing signs that ex­ports and busi­ness in­vest­ment are broad­en­ing and strength­en­ing.

In a speech to the Saska­toon Re­gional De­vel­op­ment Au­thor­ity, deputy gov­er­nor Ti­mothy Lane said Mon­day in­ter­na­tional trade is key to Canada’s eco­nomic growth po­ten­tial.

How­ever, he cau­tioned the cen­tral bank is also keep­ing close tabs on the rise in pro­tec­tion­ist sen­ti­ment in some parts of the world and what it might mean for the Cana­dian econ­omy.

Lane noted that pop­ulist move­ments in some of Canada’s ma­jor trad­ing part­ners are de­mand­ing new trade bar­ri­ers and that such pro­tec­tion­ist mea­sures would un­doubt­edly mean less trade which would re­duce eco­nomic growth.

“With the rise in pro­tec­tion­ist sen­ti­ment in some parts of the world, we have been en­ter­ing a time of height­ened un­cer­tainty about the rules of the game on in­ter­na­tional trade,” said Lane, ac­cord­ing to a pre­pared text of

his speech re­leased in Ot­tawa.

“The pos­si­bil­ity of a ma­te­rial pro­tec­tion­ist shift - par­tic­u­larly re­gard­ing the out­come of ne­go­ti­a­tions on pos­si­ble changes to NAFTA - is a key source of un­cer­tainty for Canada’s eco­nomic out­look.”

On­go­ing talks be­tween Canada, the United States and Mex­ico to rene­go­ti­ate the NAFTA agree­ment be­gan this sum­mer. U.S. Pres­i­dent Don­ald Trump

promised changes to the deal in his elec­tion last year and has threat­ened to end the agree­ment if he can’t make the changes he wants.

In his speech, Lane said ex­panded mar­kets for Cana­dian ex­ports have not been the only ben­e­fits from trade lib­er­al­iza­tion.

“We also ben­e­fit from the greater ef­fi­cien­cies that can be achieved by those ex­porters that do ex­pand, the height­ened

com­pe­ti­tion and bet­ter ac­cess to im­ported in­puts that come with greater open­ness to im­ports and the re­sult­ing spur to in­no­va­tion through­out the GVCs(global value chains),” he said.

“If trad­ing rules are changed in a way that un­der­mines these ben­e­fits, the re­sult would be both lost ex­ter­nal de­mand for ex­ports and lower po­ten­tial growth for Canada as well as for the United States and other trad­ing part­ners.”

CP PHOTO

A se­cu­rity guard walks past the Bank of Canada, in Ot­tawa on Wed­nes­day, Sep­tem­ber 6, 2017.

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