Ottawa urged to overhaul trade services to boost exports
The report released today recommends Canada put a renewed focus on promoting Canadian trade or it will miss out on the opportunities promised by recent free-trade deals with South Korea and the European Union.
It points to the slow recovery of exports in Canada after the recession, saying the volume of merchandise exports shipped in 2012 was actually five per cent lower than in 2000, if the price increases enjoyed by commodities suppliers are discounted.
Among the G7 countries, Australia, the U.S., Germany and Japan outstrip Canada in growth of exports and even the falling loonie has failed to fully revive the export sector.
Canadian businesses need more than trade agreements to succeed internationally, including diplomatic support to help business people overcome hurdles, says the report titled Turning the corner: How to restore Canada’s trade success.
“Trade agreements do not cover all policy and regulatory barriers,” the report says, adding “Companies must build relationships with new customers and suppliers, acces capital, navigate red tape and manage their risks – all in a new political, cultural and legal landscape.”
Perrin Beatty, president and CEO of the Chamber of Commerce, says Canada has to look beyond a weaker dollar to power exports.
"The issue the federal government needs to look at ‘are we branding Canada?’" Beatty said in an interview with CBC's The Lang & O'Leary Exchange.
"The BBC did a survey which looked at all of the countries in the world and Canada came No. 2 in terms of favourability, after Switzerland. Then if you take a look at ‘made in whatever country’ in the top 20, Canada wasn’t even there."
Among the Chamber's recommendations:
1. Integrate the federal services aimed at business development. There are too many different programs in different departments (Trade Commissioner, Export Development Canada, Canadian Commercial Corp., Industry Canada, Natural Resources Canada, Agriculture Canada) with service agents unaware of what is offered by other departments.
2. Reach out to business with marketing campaigns that explain federal programs.
3. Provide a single portal or contact point for business trade promotion services.
4. Take a more active approach to promoting Canada’s business brand, including more high level delegations in which business people travel with politicians.
5. Work with the private sector and provinces to co-ordinate trade delegations.
6. Expand the skill set of trade commissioners in the diplomatic service.
"We have scattered services – we need much better co-ordination," Beatty said. "Our Trade Commissioner service is undercapitalized at the present time – they need more money and our trade commissioners themselves could use more training in business. There’s a lot we could be doing to up our game."
The study comes just after Bank of Canada government Stephen Poloz expressed concern about the performance of Canadian exports, saying slow growth may be the new norm.
Another study by the Council of Canadian Executives, also released today, recommends Canada consider dropping all its tariffs and taxes on imported goods and unilaterally adopt global free trade.
The report, by economists Dan Ciuriak and Jingliang Xiao, argues that tariffs distort domestic prices and raise the cost of production inputs, as well as necessitating an expensive enforcement infrastructure.
Ottawa would lose about $4 billion in tariff revenue under the plan, but there is potential for the economy to expand by more than one per cent.
Ciuriak argues the scheme has the potential make Canada attractive as a global production hub.