The Canadian government faces a new hurdle as it shifts from negotiating free trade deals to implementing them: companies that are overly cautious about courting new business overseas.
International Trade Minister Ed Fast is encouraging businesses to look beyond their reliable American partners for the biggest growth potential — even as the U.S. economy picks up steam.
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Companies needn’t ignore Canada’s most-important trading partner, but should also consider exploring foreign markets, like Asia and Europe, Fast said last Thursday in an interview with The Canadian Press.
“We know that Canadian companies tend to be cautious, they tend to be risk averse,” he said. “The United States is a good place to start, but don’t forget the rest of the world because over the last decade the highest growth rates and the biggest opportunities have been in those markets.”
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The Conservative government has long argued that trade is key to generating economic growth and jobs. Fast said the government has signed free-trade deals with 38 countries over the last nine years. The real challenge has been persuading companies to walk through the open door to access those overseas markets.
Canadian firms have grown accustomed to living next to the world’s biggest economy, which shares similar laws and culture, Fast noted. But with oil prices contributing to a lower Canadian dollar and making the country’s goods and services relatively cheap, he believes it’s a perfect time to branch out.
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An estimate from Fast’s department says only 40,000 of Canada’s one million small- and medium-sized businesses are exporters—and just 10,000 of them export outside the U.S.
Next week, Fast will lead a trade mission of more than 100 business people to South Korea, which recently finalized an agreement with Canada. The minister has also been holding workshops around the country, trying to entice companies to use available government services that can help them pursue foreign business opportunities.
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“I can tell you, this government will continue to have a singular focus, a laser-like focus, on making sure Canadian companies take up the opportunities that we’ve opened up around the world,” Fast said.
Fast has also been juggling a new cabinet role as acting foreign affairs minister, which he assumed earlier this week following John Baird’s surprise resignation.
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He said Prime Minister Stephen Harper will select a permanent foreign affairs minister in “due course.”
“Listen, it’s not for me to speculate who the prime minister would appoint to permanent position of foreign affairs minister,” Fast said when asked what he would say if he was offered the job. “I’ve worked very hard to serve the prime minister in the role he’s appointed me to and I will continue to do so.”
On Thursday, fresh data showed Canada’s trade deficit with countries other than the U.S. widened to $3.8 billion in December, up from $3.5 billion a month earlier. Overall, the country’s $649-million international trade deficit for December was lower, and therefore more positive, than the $1.2-billion shortfall experts had anticipated, according to Statistics Canada.
Economists said stronger sales of manufactured goods and mineral products offset the drop in value of energy exports, a consequence of weaker oil prices.
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Which overseas markets do you export to? Share your experiences using the comments section below.