Trudeau government should end obsession with trade diversification

By Steven Globerman, Fraser Institute
The Hub
December 19, 2023
Category: Business & Politics
Region: Canada, United States

For decades the federal government has tried to diversify Canada’s trade exports and reduce our reliance on the U.S. market. And yet, the share of exports to the United States has remained virtually unchanged. Now the government has launched the Indo-Pacific Strategy (IPS) meant to increase Canada’s exports to India, Korea, Japan, China, and other Asian countries. However valid these justifications for trade diversification, a realistic appraisal of the IPS should be highly skeptical of their benefit to the Canadian economy. …In addition to the intrinsic challenges of trade overseas, the current political tension between Canada and China will likely further limit the success of the IPS. Against this background, it’s crucially important that Canadian trade representatives propose bold new trade initiatives that address current bilateral trade irritants (including softwood lumber, steel, and aluminum). The upcoming review of the Canada-U.S.-Mexico (CUSMA) trade agreement scheduled for 2026 may be the last best opportunity.

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