Canada and the United States seek ‘friendly’ trade partners in a perilous world

US Trade Representative Katherine Tai visited Canada this week – a two-day, two-city visit with International Trade Minister Mary Ng meant to show the closeness of Canada-US relations.

Two countries that share the same democratic values ​​in a tumultuous world. Two governments have pledged to expand trade. Neighbors. The partners. Friends.

There are of course sticking points. The Americans want Canada to respect a decision on the allocation of duty-free dairy products from the United States. Canada wants the Biden administration to avoid any protectionist measures as both countries ramp up production of zero-emission vehicles.

In an interview broadcast this weekend on CBC The House, Ng said she believes the two countries are united in recognizing the value of the automotive industry’s integrated supply chain. She noted that she and Tai visited a GM plant in the Toronto area where these next-generation vehicles are being developed.

International Trade Minister Mary Ng, right, looks on as U.S. Trade Representative Katherine Tai responds to a question during a joint press conference in Ottawa on May 5, 2022. (Adrian Wyld/The Canadian Press)

“And here what you see is an American company that has some of its most significant research and development, certainly in autonomous vehicles and electric vehicles, anchored here in Canada,” she said. .

“It’s an example of the collaboration, the industry collaboration in the automotive sector that’s already happening. And, you know, we really plan to continue to explore those opportunities not just in the automotive sector, but in, you know, in a range of clean energy sectors between Canada and the United States.

Canada relies heavily on this trade relationship with the United States. This is particularly important in the context of a new global disorder emerging after Russia’s invasion of Ukraine, and with a more aggressive China cracking down on democratic dissent in Hong Kong and maintaining heavy pressure on Taiwan.

A man walks past a destroyed building in Mariupol, Ukraine, Wednesday, May 4, 2022. Russia’s invasion of Ukraine is one of many destabilizing factors encouraging Western nations to trade with friendly partners. (Alexei Alexandrov/Associated Press)

This mess has led to a push trade experts have called “friend-shoring” – efforts to find suppliers based in Western countries.

“And that means instead of going overseas and doing business all over the world…you’re either going to relocate to your home country. [or] friend with countries that share your values,” said former Conservative Party aide Adam Taylor, who now runs the consultancy firm Export Action Global in Ottawa.

“And we’re going to see more.”

No ‘God-given right’ to US trade

It looks like a win-win for Canada. The United States is already Canada’s largest trading partner. But Scotty Greenwood, CEO of the Canadian American Business Council, warns that access to the US market should not be taken for granted.

“Canada does not have a constitutional, God-given right to access the U.S. market at any time, on its own terms. Canada must establish its relevance in the global economy and with its partners in order to have influence he wants to negotiate,” Greenwood said. The House when asked if there was growing protectionist sentiment under President Joe Biden.

“So the question is not, ‘Is the United States a reliable partner?’ The question is, how can the United States and Canada sit down and do business together, and I think Canada has made a very credible case for why our economies are integrated. also part, [about] why it is in the interest of the United States to build together and not erect these barriers against each other. But it’s an ongoing and constant struggle.”

The other question is whether the two countries should take the same approach to autocratic regimes like China.

CBC News: The House12:13Democracies that trade together, stay together

International Trade Minister Mary Ng discusses the idea of ​​trade and production “among friends” in democracies, while trade experts Adam Taylor and Maryscott Greenwood present their views on the evolution of the global business environment. 12:13

The “risk” of trading with autocracies

To help ease inflationary pressures, the Biden administration is considering lifting punitive tariffs imposed on Chinese goods during Donald Trump’s tenure.

During a press conference with Ng in Ottawa, Tai was asked whether the two countries should trade with autocratic regimes.

“We take risk and how we manage risk in global supply chains very seriously. It’s a big part of the conversation between us,” she said. “When it comes to autocracies, there is a particular risk that we realize in terms of business relationships that … have a higher risk profile.”

Statistics Canada reported this week that Canada’s exports to China increased by 14% between 2020 and 2021, a period that covered the illegal detention of Canadians Michael Spavor and Michael Kovrig. Coal exports paved the wayeven though Canada is committed to doing more to reduce greenhouse gas emissions.

Coal helped boost Canada’s exports to China from 2020 to 2021. (Istock)

“Well, we are committed to promoting human rights around the world. We are committed to helping businesses grow, especially to grow in green economies,” Ng said. The Housepointing to Tai’s visit as a signal that Canada is actively engaged in building reliable supply chains with like-minded countries.

“We are seeing record trade volumes with the Europeans. We are seeing $1 trillion – the highest trade we have ever had with the United States in the past year.”

Canada is also leading efforts to reform the World Trade Organization to support more rules-based trading relationships, Ng said.

Trade has not changed Russia, China: Taylor

“I think Canadians are looking to us, and that’s certainly the work I’m doing, advocating, promoting and supporting rules-based trade and working to solidify the supply chains that Canadians rely on. expect of us, and especially in an area where we have the power to build for the planet and for people.”

Taylor said that while Ng deserves credit for his leadership at the WTO, the long-standing liberal position that engagement with countries like China and Russia allows Canada to push for human rights. rights and other reforms is now outdated.

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

Ng said this is one of the main reasons Canada continues to seek new trading partners in Asia and promote friend-shoring to strengthen existing supply chains in North America and in Europe.

It is about extracting more value from these shared values.

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