How Canada can boost its international trade game
Omar Allam || Special to The Globe and Mail || Published Thursday, Jan. 05, 2017
As Canada looks for ways to attract more foreign investment (FDI) and boost its economy, it is preparing for a busy year ahead of investor-friendly reforms.
Canada is set to introduce a one-stop service for attracting brown field and green field investments in key sectors of the economy, attracting top global talent by loosening immigration rules, and establishing a Canada infrastructure bank mandated to invest in a 10-year, $35-billion plan. And, on Thursday, International Trade Minister Chrystia Freeland spoke to a crowd of business executives and foreign-trade specialists in Montreal on the $218-million investment organization she announced in December. While the speech was largely a recap of Canada’s achievements, the importance of this initiative shouldn’t be underestimated.
Canada must approach this investment project head-on, with a sophisticated and equally balanced international export and investment strategy.
The hub must involve participation with the private sector from day one, combined with results-focused actions with the provinces and municipalities to attract FDI while promoting Canadian exports overseas with a focus on high-growth emerging economies.
The NBA’s Golden State Warriors epitomize how to cultivate and run a championship franchise that is built for both current and future success, having gone from a laughingstock to league champs. The team was constructed from a top-down and bottom-up perspective, and this winning culture was executed to perfection under new leadership. The Warriors win games and prevail because of how they execute their playbook, forcing opponents to follow suit or at least try to keep up.
Against wily competitors such as China, Germany, the United States and Britain, it’s unrealistic to assume that Canada can tap into foreign investment and know-how to build a powerful, export-oriented economy and rapidly expanding middle class if we simply run a few plays, no matter how well designed.
These are some of the key fundamentals that Canada should include in an updated international-trade game plan:
Build up Team Canada: Playing the right way means playing unselfishly. Respect each other, play hard, fulfill your role and care about the team more than anything individually. Solving problems in Canada’s complex international-trade relations requires a sustained and comprehensive approach that isn’t just focused on quick wins. In order to avoid launching various global-trade initiatives that aren’t connected with the realities and challenges facing Canadian exporters, we need to undertake a non-partisan, third-party review and SWOT of trade and investment services delivered by federal and provincial government departments and agencies with international portfolios – it starts with Global Affairs Canada. This “silo effect” is hurting Canada’s chances of achieving and sustaining growth and innovation in international markets.
Work with other trading partners: Competition makes us faster; collaboration makes us better. Signing the Canada-European Union free-trade deal highlighted Canada’s increased credibility in international trade.
Canada can leverage its influence by continuing to pursue a strong market-opening trade agenda and by assuring that the Trudeau government can roll-up its sleeves and work with Canadian companies to access high-growth markets.
Put points on the board: A team can hold the ball longer than its opponent, and have more big plays. But none of that matters if it doesn’t actually score more points and win the game. We need more interchange assignments between government and industry and we need to emulate our competition by assigning a mix of international trade experts from the private sector and government to multilateral development agencies like the World Bank, African Development Bank, and Asian Development Bank. Our industry associations also need a new business model backed by more people and financial resources to promote trade and investment. Just look at the U.S. Chamber of Commerce and the Association of the German Chambers of Commerce and Industry as successful benchmarks for Canada.
Spend wisely on new trade resources and leveraging existing ones: To make a competitive leap, teams will often increase their payroll to sign needed free-agent talent. Ottawa should explore additional ways to leverage current government resources and use the considerable expertise of private sector trade experts who routinely support international trade and foreign policy initiatives to advance Canadian trade. Additionally, the CanExport program needs a new innovative business model that provides an increase in funding and different forms of financing for small firms, realistic criteria for companies that export less than $200,000 in a year and not restrict funding to Canadian exporters with a 24-month cap in a given market.
Pressures are building on many fronts – a Trump Presidency, civil war in Syria, Russia in the East, and global threats like climate change and terrorism. The world is watching Prime Minister Trudeau and Canada is one country that could lead the modernization of the international system so as to supply security, economic opportunity, and prospects for diversity and freedom. Canada’s international trade and foreign policy—its projection of power and principle—must be grounded in the emerging economic order.
It is time for Canada to step up its game and win a fairer and more beneficial trading relationship in global markets where we can compete. To do this, our “coaches” in Ottawa and the provinces need to do some soul searching and ask: what kind of role do we really want Canadian companies to play in today’s global economy? And what needs to be done to create a collaborative ecosystem where business and government can work together to boost exports and attract foreign investment?
Canada’s trade playbook should certainly use tough tactics, hard-hitting plays, and strong teammates to help our companies and workers score more exports in global markets.
Once Canada designs a new export and investment playbook for international markets, we need to make sure we can execute. That means focusing on our own economic fundamentals—including excellent training for our workers, well-designed incentives for innovation and attracting top tier talent, efficient infrastructure, reasonable rules, a sound economy and effective backing from our trade officials. After all, legendary coaches recognize that playbooks alone don’t win games: “In the end, it comes down to team work and solid fundamentals.”
A new Canadian international trade strategy will allow Canada to go on offense, breaking down anti-globalization rhetoric and trade barriers and providing more opportunity for Canadian exporters and workers to sell to hundreds of millions of new middle class consumers around the world. With a well-prepared team and a solid, aggressive trade strategy, Canada will be able to stand its ground on the global economic gridiron. Collectively we need to work together, take on more risk, and challenge the status quo. However, if we continue operating as we currently are in tomorrow’s new information age, Canada will be left behind, our companies will be driven out of business by competitors, and it will lead to an inevitable loss of jobs.
About the Author:
Omar Allam is a former Canadian diplomat with private sector, UN, and World Bank experience in international trade, investment attraction and foreign policy. He currently serves as CEO/Founder of Canada based Allam Advisory Group an integrated global trade advisory consulting firm.