Carlo Dade
In the Edmonton Journal

December 2, 2016

Donald Trump’s announcement that he will withdraw the United States from the trans-Pacific Partnership (TPP) effectively killed the massive trade deal while simultaneously tearing a hole in Western Canada’s trade agenda in Asia.

Canada now must find other ways to stitch together opportunities for the western provinces in the Pacific. In this context, the just completed major trade mission to China by the Government of Alberta takes on even greater importance in securing the province’s future export growth. China is Canada’s second largest trading partner, after the U.S. Although the province has seen a slower growth in Asian economies in 2016, growth is projected to gradually rebound to an average of 6.2 per cent a year (2016 – 2020).

Canada currently has only one trade agreement in Asia. The TPP would have given Canadian companies seven new agreements. Further, it would have closed the gap with our major competitors in Asia – including Australia and New Zealand, which have more than a dozen trade agreements each, and Chile, which produces many of the same commodities as we do in the West and has nine agreements.

Trade agreements level the playing field and give companies an opportunity to compete for markets on an equal footing with their competitors. But they also give advantages that companies from countries with agreements can use to keep competitors out or make entry costlier and more difficult. That is the uphill climb facing Canadian companies in Asia today – struggling to climb the hill while their competitors ride the “trade agreement gondola” to the top.

In the fallout from the TPP, Ottawa will have to pursue a slower, more difficult bilateral approach, negotiating deals one by one, country by country. Meanwhile, Canada will need to find other ways to open markets, raise awareness and fill in the gaps left behind by unsigned trade agreements.

In Alberta, that means the province must increase its outreach to Asia, including more advocacy and education at home and abroad.

These kinds of investments are key, even if their returns aren’t immediately obvious. You can’t move goods to markets without roads, and you can’t access those markets without the soft infrastructure of connections, good will and strong brand.

The Government of Alberta just completed missions to China and Japan, connecting with buyers and investors and promoting Alberta industries including softwood lumber, agri-food, tourism and technology in an effort to tap into the regions’ powerful – and growing – middle class. According to the OECD, the global middle class will reach nearly 5 billion by 2030 and a majority of those consumers will be in Asia.

In Asia, Canada remains Cana-who? Never mind Alberta, which is still essentially unknown, despite these recent inroads. Australia and the U.S. are the dominant brands. We do not compete on price, but on quality, reliability, safety and other factors that require a strong sales job. The key to success, then, is showing up and being there. That takes repeated trips not just from business but, equally important, from government as a signal of deeper commitment.

This may not be the way we do business at home, or in the U.S., and as such the need may not be readily apparent to those who sell only in those markets. But if Alberta wants to realize the opportunities that lie beyond its borders – and beyond those of the U.S. and its increasing opposition to free trade – this is the reality.

State-level visits to Asian markets is something that New South Wales, Western Australia and Queensland all do with frequency and resources. It is crucial that Alberta make the same investment.

There may not be stunning, headline grabbing announcements out of the China trip; those will come later. But like any good business person will tell you, in the sales game as in chess, it is never the final move for checkmate that wins the game. It is the series of moves before. This trade mission is how Alberta will set itself up for success in Asia.

Carlo Dade is the director of the Centre for Trade & Investment Policy at the Canada West Foundation.