By Carlo Dade
In the Winnipeg Free Press
Nov. 27, 2015
Manitoba’s healthy preoccupation with the importance of our trade south of the border brings balance to the rest of Western Canada’s singular obsession with distant markets.
It is remarkable how ready some provinces are to overlook the importance of trade with the U.S., which remains by far our largest and most important market. The further west one travels, the faster and seemingly more dismissively one hears, “Yeah, but just look at China.”
Manitoba is the sober antidote to our China-mania and for good reason: 72 per cent of its trade is with our southern neighbour.
It anchors us to the reality of trade; it is Aesop reminding us a bird in the hand in the U.S. is worth two in some distant Asian bush. Manitoba often seems the lone voice in the West, reminding us the majority of every western province’s foreign trade is south, not west across the Pacific Ocean, and that we need both markets.
Trade diversification should not come at the expense of market share in what is the richest and easiest market on the planet. The ideal scenario for Western Canada is to see the rate of growth of our trade with Asia exceed the rate of growth of our trade with the U.S.
We want our trade in both markets to grow, but it will become more difficult under the new reality of the Trans-Pacific Partnership (TPP).
The agreement will turn North America from a privileged market we shared almost exclusively with Mexico to a more competitive and more difficult 12-nation replacement for NAFTA. We will soon have nine new low-cost competitors competing for our best customers in the U.S. At the same time, every new market to which we gain access under the TPP comes with those same competitors. So, new markets will be difficult as well.
We need to prepare to step up our trade game, not just in Asia but also here in North America. With approval and implementation of the TPP likely in 2017, we have little time to waste. In a recent speech to the Business Council of Manitoba, I outlined three ways in which Manitoba could take the lead:
The reality of the TPP replacing NAFTA has largely escaped public notice. It will affect the West’s trade with the U.S. We need a champion to ensure the federal government takes western issues into account. A champion would also bring the West together in high-level public/private meetings to get these issues in front of the public and on policy agendas. This would be a natural role for Manitoba.
Second, we will need allies in our fight to maintain advantage in North America. The only country with as much at stake as us is Mexico. Strengthening relations, repairing damage from the previous government’s decision to impose visas and catching up with Ontario and Quebec, whose premiers are constantly in Mexico, is a priority. Former Manitoba premier Gary Doer was the last western premier to visit Mexico; with Mexico exploring investments in CentrePort and plans to open a consulate in Winnipeg, Manitoba leadership on this front seems natural.
Finally, a key to keeping our market share in North America will be our ability to move products and people efficiently, cheaply and safely. Distance from market is a competitive disadvantage for us in Asian markets but an advantage in North America, one that we could build on. Manitoba, in fact, has four direct transportation links to Mexico: rail, road, air and sea (via the Port of Churchill).
As the geographic centre of North America, Manitoba can and should play a leading role.
The need and opportunity are there; the West would benefit if Manitoba takes up the challenge.
Carlo Dade is the director of the Centre for Trade & Investment Policy at the Canada West Foundation.
Republished from the Winnipeg Free Press print edition November 27, 2015 A11