|
|
|
DARRYL DYCK/The Canadian Press
|
|
|
|
|
|
|
U.S. president-elect Donald Trump’s social-media declaration last week that he intends to impose a 25-per-cent tariff on all imports from Canada has jolted Canadian political and business leaders into a state resembling crisis mode.
|
|
|
Trump made the announcement last Monday. Later that evening, Prime Minister Justin Trudeau was already on the phone with him. By Wednesday, Trudeau had called a rare meeting with premiers, generally not his favourite group of people. By Friday, the Prime Minister was headed to Florida to meet with Trump at Mar-a-Lago.
|
|
|
|
|
The urge by many Canadians to wish their government would instead heed time-worn advice and stand up to the bully rather than capitulate to his demands is understandable. But British Columbia’s experience shows that’s easier said than done.
|
|
|
For years, while premiers of all stripes have been trying to wean the province off its reliance on its overwhelmingly dominant trading partner by mounting successive trade missions to Asia, there has been stubbornly little success.
|
|
|
|
|
|
In 1987, five years after the softwood lumber trade dispute with the United States began, the province’s share of exports heading to the country was 46 per cent. Ten years later, it was 55 per cent, then 60 per cent in 2007. By July of this year, the figure was just more than half.
|
|
|
“Canada is so privileged to be next door to this giant economic engine of the United States,” former B.C. premier Glen Clark noted in an interview. “We understand the laws there, we understand the language, we understand the people, and it’s very close, so it’s a natural.”
|
|
|
But the relationship also means B.C. is highly vulnerable to the U.S.’s erratic politics. Mr. Trump’s tariff threat should be a catalyst for a fresh commitment to cultivate new markets, said Clark, who led 13 trade missions to China alone during his term as premier, from 1996 to 1999.
|
|
|
“Reviving that trade policy, only with different focus on parts of the world, makes a lot of sense as we move forward in this kind of dangerous time.”
|
|
|
That’s what Premier David Eby says he’ll do, declaring last week that his government is “going to continue to do our work to expand those trading opportunities.”
|
|
|
British Columbia sent $16.9-billion in exports to the U.S. between this past January and July. In the same period, it sent $4.9-billion to Mainland China, $3.5-billion to Japan, $2.2-billion to South Korea and $856-million to India. (South Korea is a small success story: that figure is a 22-per-cent increase compared with the year before.)
|
|
|
Diversifying is going to mean reaching for some options that may not be very palatable right now, said David Emerson, who helped steer Canada toward trade diversification. As deputy finance minister under premier Bill Bennett and deputy minister to premier Bill Vander Zalm, he crafted B.C.’s Asian Pacific trade strategy, and later introduced the Asia-Pacific Gateway and Corridor Initiative as the federal minister of international trade.
|
|
|
“I do believe we need to grow market penetration in markets other than the U.S., but the greatest potential is in markets where we now have terrible relations,” Emerson said. “Today, relations with China and India are a mess, and the great trade diversification strategy has run into serious trouble.”
|
|
|
Canada and China are in the midst of a trade spat. In August, Ottawa announced a 100-per-cent import tariff on China’s electric vehicles and a 25-per-cent tariff on its steel and aluminum products, after the U.S. and the European Union introduced similar measures. The following month, Beijing launched an anti-dumping investigation into imports of rapeseed from Canada.
|
|
|
Canada’s relations with India have also soured after Trudeau said last year that there were credible allegations that the Indian government had links to the assassination of Sikh-Canadian activist Hardeep Singh Nijjar in Surrey, B.C. Canada has since alleged that India’s Home Affairs Minister, Amit Shah, ordered the targeting of Sikh activists in this country. Both countries have now expelled each other’s top diplomatic officials.
|
|
|
Peter Morrow, an associate professor of economics at the University of Toronto who focuses on trade, spoke to Globe reporters Jason Kirby and Mark Rendell earlier in November, before Trump dropped his bombshell. Morrow said global trade patterns are overwhelmingly determined by the size of and distance between trading partners.
|
|
|
“You can’t just have Canada wake up and decide that it’s going to trade with England in similar quantities as it trades with the U.S. So, when you talk about diversifying away from the U.S., you’re really fighting against very strong economic forces.”
|
|
|
This is the weekly British Columbia newsletter written by B.C. Editor Wendy Cox. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.
|
|