Canada and the U.S. are looking for 'friendly' trading partners in a perilous world & More News Here

U.S. Trade Representative Katherine Tai visited Canada this week — a two-day, two-city go to with International Trade Minister Mary Ng meant to showcase the closeness of the Canada-U.S. relationship.

Two international locations that share the similar democratic values in a tumultuous world. Two governments dedicated to increasing commerce. Neighbours. Partners. Friends.

There are factors of friction, after all. The Americans need Canada to reside as much as a ruling on the allocation of tariff-free dairy merchandise coming from the U.S. Canada needs the Biden administration to keep away from any protectionist measures as each international locations ramp up manufacturing of zero-emission autos.

In an interview airing this weekend on CBC’s The House, Ng mentioned she’s assured the two international locations are united in recognizing the worth of the auto business’s built-in provide chain. She famous that she and Tai visited a GM plant in the Toronto space the place these next-generation autos are being developed.

“And here, what you’re seeing is an American company that has some of their most important research and development, certainly in autonomous vehicles and electric vehicles, anchored here in Canada,” she mentioned.

“That’s one example of the collaboration, the industrial collaboration in the auto sector that already is taking place. And, you know, we’re really looking at continuing to explore these opportunities not only in the auto sector, but in, you know, in a range of clean energy sectors between Canada and the United States.”

Canada depends closely on that U.S. trading relationship. It’s particularly vital in the context of a new world dysfunction rising after Russia’s invasion of Ukraine, and with a extra aggressive China cracking down on democratic dissent in Hong Kong and sustaining heavy stress on Taiwan.

That dysfunction has led to a push that commerce specialists referred to as “friend-shoring” — efforts to seek out suppliers based mostly in western international locations.

“And that means instead of going offshore and doing business anywhere around the world … you’re either going to re-shore back to your home country [or] friend-shore with countries that share your values,” mentioned former Conservative Party aide Adam Taylor, who now heads the consulting agency Export Action Global in Ottawa.

“And we’re going to see more of that.”

No ‘God-given proper’ to U.S. commerce

That appears like win-win for Canada. The U.S. is Canada’s largest trading accomplice already. But Scotty Greenwood, CEO of the Canadian American Business Council, warns that entry to the American market should not be taken for granted.

“Canada doesn’t have a God-given, constitutional right to access the U.S. market at any time it wants on its own terms. Canada has to establish its relevance in the global economy and with its partners in order to have the leverage it wants to negotiate,” Greenwood instructed The House when requested if there’s a rising protectionist sentiment underneath President Joe Biden.

“So the question isn’t, ‘Is the U.S. a reliable partner?’ The question is, how do the U.S. and Canada sit down and do business together? And I think Canada has made a very credible case for why our economies are integrated. And I’ve been part of that too, [about] why it is in the U.S. interest to build things together and not build up these barriers against each other. But that’s an ongoing, constant struggle.”

The different query is whether or not the two international locations ought to undertake the similar method to autocratic regimes reminiscent of China.

The ‘danger’ in trading with autocracies

To assist ease inflationary pressures, the Biden administration is looking at lifting punitive tariffs imposed on Chinese items throughout Donald Trump’s time period in workplace.

Tai was requested throughout a information convention with Ng in Ottawa whether or not the two international locations needs to be trading with autocratic regimes in any respect.

“We are placing a real focus on risk, and how we address risk in global supply chains. That is a lot of the conversation between us,” she mentioned. “With respect to autocracies, there is a particular risk that we are realizing in terms of trade relationships that … present a higher profile in terms of risk.”

Statistics Canada reported final May that exports from Canada to China rose 14 per cent from 2020 to 2021 — a interval that coated the unlawful detention of Canadians Michael Spavor and Michael Kovrig. Coal exports led the approach, regardless that Canada has vowed to do extra to scale back greenhouse fuel emissions.

“Well, we are steadfast at promoting human rights around the world. We’re steadfast at supporting businesses to grow, particularly in building out into the green economies,” Ng instructed The House, pointing to Tai’s go to as a sign that Canada is actively engaged in constructing reliable provide chains with like-minded international locations.

“We are seeing record-high trading volumes with the Europeans. We are seeing $1 trillion — the highest trade that we’ve ever done with the United States in this last year.”

Canada is also main efforts to reform the World Trade Organization to assist extra rules-based trading relationships, Ng mentioned.

Trade hasn’t modified Russia, China: Taylor

“I think Canadians are looking to us, and this is certainly the work that I am doing, advocating and promoting and supporting rules based trade and working to solidify those supply chains that Canadians would expect us to, and particularly in an area where we have to be able to build out for the planet and for the people.”

Taylor mentioned that whereas Ng deserves credit score for her management at the WTO, the long-held Liberal place that partaking with international locations like China and Russia permits Canada to push for human rights and different reforms is now outdated.

“Russia has been part of the WTO for about 10 years. And there’s been no demonstrable political and social freedoms in that country,” he mentioned. “The same with China.”

Ng mentioned that is a key cause why Canada continues to look for new trading partners in Asia and to advertise “friend-shoring” to bolster current provide chains inside North American and Europe.

It’s all about getting extra worth out of these shared values.

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