Prime Minister Justin Trudeau, right, sits beside Minister of International Trade Chrystia Freeland as they take part in a Trans-Pacific Partnership meeting on the side-lines of the APEC Summit in Manila, Philippines on Wednesday, November 18, 2015. (Sean Kilpatrick/CP)
Ottawa hosted a major gathering of Canada’s top diplomats from 130 countries last week. These meetings represented an important opportunity for Canada to begin engaging diplomats and rebuilding “Made in Canada” as a leading global brand. These closed-door meetings in the nation’s capital have the potential to contribute significantly to the future of Canada’s international trade strategy, rooted in commercial diplomacy. Follow-up and action is key to success.
When Prime Minister Pierre Trudeau came to power in 1968, he sparked big conversations about diplomacy and Canada’s role in the world. The result was the creation of the Department of External Affairs and International Trade in 1982, which would be responsible for all foreign trade and foreign policy functions. Fast-forward 25 years and enter the Harper government, which changed Canada’s position on key global issues like trade, diplomacy, defence, development, and multilateralism. The Harper government was criticized for failing to engage diplomats, who became demoralized, leading our public service back into old habits, using out-dated tactics and discouraged them from being creative in their support to Canadian small and medium-sized exporters.
We saw important advances in recent years however with some significant free-trade agreements such as the Comprehensive Economic and Trade Agreement with the E.U., the Canada-Korea Free Trade Agreement, and the Trans-Pacific Partnership. Even with these agreements in place, Canadian exporters will continue to face the same fundamental challenges—lack of capital to expand into global markets, lack of contacts and local insights, and finally, a lack of coordination, duplication and overlap of federal and provincial trade and investment services.
We’ve lost ground in the global economy and the proof is staring us in the face today. Canada ran a near-record trade deficit of $2.94 billion in April of 2016 as the economy continued to struggle with weak crude oil prices that have slashed the value of exports and curbed growth. That deficit, announced by Statistics Canada on June 3, 2016, was the 20th declared trade deficit in a row, and greater than the $2.45 billion shortfall forecasted by analysts.
It’s time for the business community and our partners in government to ask: what kind of role do we really want Canadian companies to play in today’s global economy? And what needs to be done to create a collaborative ecosystem where business and government can work together to boost exports and attract foreign investment?
What Canada really needs is an international trade strategy that includes the private sector as part of the policy discussions from day one. This won’t be easy. It will involve tough choices and there will be people who disagree about the priorities. But there can be no complacency. The government really needs to get more creative and innovative.
For those of us in the private sector (and global entrepreneurs with real skin in the game) we need to set out a more energetic, aggressive approach to winning the best export deals for Canada and attracting high value inward investments. According to a recent study of Canadian business owners, C-suite and senior managers, when it came to businesses thinking about taking the plunge internationally, 46% felt they didn’t have the insights needed to identify markets for expansion, 63% said they didn’t know the steps required, and 24% didn’t even know where to start.
Canadian business leaders can’t rely on the same excuses not to explore international market expansion. Nor can we expect public servants and politicians to do all of the heavy lifting. Collectively we need to work together, take on more risk, and challenge the status quo.
Here’s what needs to happen with Canada’s new international trade strategy:
1. Coordinate better
We need to undertake a detailed external international trade review and SWOT analysis of trade and investment services delivered by Global Affairs Canada, the Canadian Trade Commissioner Service, the Canadian Commercial Corporation, Export Development Canada, Business Development Canada, as well as federal and provincial government departments and agencies with international portfolios. This will eliminate competition and turf wars between the various parties in the international trade portfolio and ensure all are clearly focused on their own mandate and mission, that is in turn focused on growing business for Canadian companies.
2. Focus on our strengths
We need to match Canadian capabilities with global opportunities. There needs to be a focus on global markets where Canada can match capacity and supply (industry capabilities, export credit and project financing) with the demand (buyers, foreign investors, and global value chains).
3. Streamline support
We need to increase and expand the scope of financial instruments and export grants available to help small and mid-market companies reduce the time, cost and risk of exporting. This goes beyond the CanExport program and other small provincial export growth initiatives that are limited in scope for companies that don’t have the time and resources to go through the extensive process.
4. Delegate where possible
We need to carefully examine the modus operandi of having one single point of contact at the federal level that can manage and lead a Canadian hub-and-spoke approach to international trade. In principle, there should be major operational savings in streamlining the services to Canadian companies, which would lead to improving the global positioning of Canadian firms and winning our share of the market in key sectors such as technology, health care, education, infrastructure, among others.
5. Share information
The vast majority of Canadian exporters are in fact small and medium sized enterprises. Above all else SMEs need real education about the benefits and the “how to” in terms of accessing foreign markets. Therefore, we should also encourage more interchange assignments between the private sector, industry associations, and the Government of Canada, as well as provide customized private sector led training on topics like how to lead global businesses and entrepreneurship for ambassadors, foreign service officers, and trade commissioners.
6. Work together
We need to strengthen federal-provincial collaboration on international trade. Both federal and provincial governments should co-invest in opening new provincial trade representation offices in strategic global markets where Canada’s 10 provinces and 3 territories have a competitive advantage.
7. Work the network
We need to emulate the competition. Other countries routinely rotate staff to key multilateral development banks. When I visit these organizations I’m often asked, “Where are the Canadians?” Canada should strategically second qualified public servants and business executives (from all provinces) who can promote Canadian industry expertise and qualify business leads well in advance to ensure Canadian companies can see and optimize the opportunities before their global competitors.
8. Attract talent
We need to attract industry and top-tier immigrant talent from around the world to our shores as well as invest in research, innovation and commercialization, which will be key to exports.
9. Clarify priorities
Finally, we need more resolve to make sure that Canadian firms benefit from trade deals that are being negotiated.
High-level speeches and statements are not enough. To carve out an international trade strategy, the Minister of International Trade needs to choreograph policies across all Canadian departments, the provinces and territories, industry associations and Canadian business leaders.
Canada is awake now: International trade strategy is the new foreign policy.
Omar Allam is a former diplomat, global entrepreneur, and CEO & Founder of the Allam Advisory Group, a Canadian based global business, strategy and commercial diplomacy consulting firm that helps clients with international strategy, market entry support, export development and investment attraction worldwide.
MORE ABOUT FREE TRADE & INTERNATIONAL TRADE:
Economy
Nine ways to improve Canada’s international trade strategy
If Canada’s government is going to expand our country’s place in the global economy, we need some creative new approaches
Omar Allam
Prime Minister Justin Trudeau, right, sits beside Minister of International Trade Chrystia Freeland as they take part in a Trans-Pacific Partnership meeting on the side-lines of the APEC Summit in Manila, Philippines on Wednesday, November 18, 2015. (Sean Kilpatrick/CP)
Ottawa hosted a major gathering of Canada’s top diplomats from 130 countries last week. These meetings represented an important opportunity for Canada to begin engaging diplomats and rebuilding “Made in Canada” as a leading global brand. These closed-door meetings in the nation’s capital have the potential to contribute significantly to the future of Canada’s international trade strategy, rooted in commercial diplomacy. Follow-up and action is key to success.
When Prime Minister Pierre Trudeau came to power in 1968, he sparked big conversations about diplomacy and Canada’s role in the world. The result was the creation of the Department of External Affairs and International Trade in 1982, which would be responsible for all foreign trade and foreign policy functions. Fast-forward 25 years and enter the Harper government, which changed Canada’s position on key global issues like trade, diplomacy, defence, development, and multilateralism. The Harper government was criticized for failing to engage diplomats, who became demoralized, leading our public service back into old habits, using out-dated tactics and discouraged them from being creative in their support to Canadian small and medium-sized exporters.
We saw important advances in recent years however with some significant free-trade agreements such as the Comprehensive Economic and Trade Agreement with the E.U., the Canada-Korea Free Trade Agreement, and the Trans-Pacific Partnership. Even with these agreements in place, Canadian exporters will continue to face the same fundamental challenges—lack of capital to expand into global markets, lack of contacts and local insights, and finally, a lack of coordination, duplication and overlap of federal and provincial trade and investment services.
We’ve lost ground in the global economy and the proof is staring us in the face today. Canada ran a near-record trade deficit of $2.94 billion in April of 2016 as the economy continued to struggle with weak crude oil prices that have slashed the value of exports and curbed growth. That deficit, announced by Statistics Canada on June 3, 2016, was the 20th declared trade deficit in a row, and greater than the $2.45 billion shortfall forecasted by analysts.
It’s time for the business community and our partners in government to ask: what kind of role do we really want Canadian companies to play in today’s global economy? And what needs to be done to create a collaborative ecosystem where business and government can work together to boost exports and attract foreign investment?
What Canada really needs is an international trade strategy that includes the private sector as part of the policy discussions from day one. This won’t be easy. It will involve tough choices and there will be people who disagree about the priorities. But there can be no complacency. The government really needs to get more creative and innovative.
For those of us in the private sector (and global entrepreneurs with real skin in the game) we need to set out a more energetic, aggressive approach to winning the best export deals for Canada and attracting high value inward investments. According to a recent study of Canadian business owners, C-suite and senior managers, when it came to businesses thinking about taking the plunge internationally, 46% felt they didn’t have the insights needed to identify markets for expansion, 63% said they didn’t know the steps required, and 24% didn’t even know where to start.
Canadian business leaders can’t rely on the same excuses not to explore international market expansion. Nor can we expect public servants and politicians to do all of the heavy lifting. Collectively we need to work together, take on more risk, and challenge the status quo.
Here’s what needs to happen with Canada’s new international trade strategy:
1. Coordinate better
We need to undertake a detailed external international trade review and SWOT analysis of trade and investment services delivered by Global Affairs Canada, the Canadian Trade Commissioner Service, the Canadian Commercial Corporation, Export Development Canada, Business Development Canada, as well as federal and provincial government departments and agencies with international portfolios. This will eliminate competition and turf wars between the various parties in the international trade portfolio and ensure all are clearly focused on their own mandate and mission, that is in turn focused on growing business for Canadian companies.
2. Focus on our strengths
We need to match Canadian capabilities with global opportunities. There needs to be a focus on global markets where Canada can match capacity and supply (industry capabilities, export credit and project financing) with the demand (buyers, foreign investors, and global value chains).
3. Streamline support
We need to increase and expand the scope of financial instruments and export grants available to help small and mid-market companies reduce the time, cost and risk of exporting. This goes beyond the CanExport program and other small provincial export growth initiatives that are limited in scope for companies that don’t have the time and resources to go through the extensive process.
4. Delegate where possible
We need to carefully examine the modus operandi of having one single point of contact at the federal level that can manage and lead a Canadian hub-and-spoke approach to international trade. In principle, there should be major operational savings in streamlining the services to Canadian companies, which would lead to improving the global positioning of Canadian firms and winning our share of the market in key sectors such as technology, health care, education, infrastructure, among others.
5. Share information
The vast majority of Canadian exporters are in fact small and medium sized enterprises. Above all else SMEs need real education about the benefits and the “how to” in terms of accessing foreign markets. Therefore, we should also encourage more interchange assignments between the private sector, industry associations, and the Government of Canada, as well as provide customized private sector led training on topics like how to lead global businesses and entrepreneurship for ambassadors, foreign service officers, and trade commissioners.
6. Work together
We need to strengthen federal-provincial collaboration on international trade. Both federal and provincial governments should co-invest in opening new provincial trade representation offices in strategic global markets where Canada’s 10 provinces and 3 territories have a competitive advantage.
7. Work the network
We need to emulate the competition. Other countries routinely rotate staff to key multilateral development banks. When I visit these organizations I’m often asked, “Where are the Canadians?” Canada should strategically second qualified public servants and business executives (from all provinces) who can promote Canadian industry expertise and qualify business leads well in advance to ensure Canadian companies can see and optimize the opportunities before their global competitors.
8. Attract talent
We need to attract industry and top-tier immigrant talent from around the world to our shores as well as invest in research, innovation and commercialization, which will be key to exports.
9. Clarify priorities
Finally, we need more resolve to make sure that Canadian firms benefit from trade deals that are being negotiated.
High-level speeches and statements are not enough. To carve out an international trade strategy, the Minister of International Trade needs to choreograph policies across all Canadian departments, the provinces and territories, industry associations and Canadian business leaders.
Canada is awake now: International trade strategy is the new foreign policy.
Omar Allam is a former diplomat, global entrepreneur, and CEO & Founder of the Allam Advisory Group, a Canadian based global business, strategy and commercial diplomacy consulting firm that helps clients with international strategy, market entry support, export development and investment attraction worldwide.
MORE ABOUT FREE TRADE & INTERNATIONAL TRADE: