With Biden’s trillion-dollar infrastructure bill and evolving policies on climate change, border issues, and trade as the backdrop, Lee Kane, Minister-Counsellor and Senior Trade Commissioner in Washington, spoke to OG100 about the latest developments with Canada’s largest trading partner. He was joined by Nadia Bourély, Minister-Counsellor for Economic and Trade Policy, and from their positions at the top of Canada’s trade team in the US, they give us our latest The Big 3 on the ongoing US/Canada trade relationship.
1. What are the current conditions that are affecting the ease of US/Canada trade?
Global economic competition and strategic collaboration have never been more important, and the importance of Canada’s relationship with the US cannot be overstated. The two countries have always collaborated carefully, particularly during the pandemic. With the US unemployment rate almost as low as it was pre-pandemic, the labour market is tight, and the US has hit the highest and longest-lasting inflation rates seen in forty years. The reality of the pandemic is exacerbating the political environment, especially with the mid-term elections later this year. And while protectionist policies may not intend to target or exclude Canada, our market may experience unintended consequences. However, by the end of 2020 bilateral trade flows surpassed 2019 totals. The flow of people and goods persists as we continue navigating the challenges and leveraging the opportunities.
2. In this challenging trade environment, what kind of opportunities exist for Canadian businesses looking to enter the US market?
The US is our largest and first export partner and will always be our most important trading partner. Despite current challenges, more than $2 billion in goods and services cross the US/Canada border every day. Supply chain issues and labour shortages are accelerating the need for short and long-term solutions, and local governments are under pressure to deliver solutions quickly. In many sectors there simply isn’t enough US production, which will lead to collaboration on near-shoring and friend-shoring solutions. Canadian businesses shouldn’t back off, but rather review their strategy in order to move forward. There is increased need for emerging technologies (automating workflow, 3D modeling, P3 development, etc.), and Canada is widely recognized for its high-quality, reliability, and R&D expertise. To facilitate collaboration and underscore the joint commitment to supply chain security and resilience, late last year Biden and Trudeau oversaw the creation of the U.S.-Canada Supply Chain Working Group which builds on the Joint Action Plan on Critical Minerals and other key sectors of interest.
3. How does a Canadian mid-sized company invest for the mid to long-term when we’re faced with such uncertainty?
The answer is different for every company and region, especially for mid-size companies. Those that aren’t large enough to lobby or work with government directly, need to work with industry partners, agencies, and local governments. It’s imperative to build strategies that strengthen your risk portfolio. Who are the partners that will help you better understand your market and its players? Support from government and agencies has never been more critical, so leverage the existing trade export network that will help you mitigate market risk.