December 12, 2013
The government’s new trade plan is not serious policy. It’s just repackaged old ideas, a crude political attempt to be seen to be doing something.
Let’s clarify the obvious. Canada needs to be a global trader and investor to remain a viable, competitive economy for the future. Critically, global market growth will not be in Europe or the US, but rather in developing countries with which we once had healthy trusting relationships as a development partner – something the Harper government has systematically undermined in recent years.
The current debate over Trade Minister Ed Fast’s new ‘Global Markets Action Plan’ (GMAP) is largely a charade. It is certainly not ‘historic,’ as one commentator has characterized it. In fact, the ‘plan’ is hardly rooted in the real world. No serious observer believes we can increase our exports or investments by merely picking a list of possible winning country markets and assailing them with cold calls and brochures. In contrast, giant competitors such as China and India have invested a decade or more in building an on-the-ground presence and credibility in Asia and Africa, and now the Americas.
‘Mobilising’ a few hundred extra under-skilled (at trade facilitation) bureaucrats in the Department of Foreign Affairs, Trade and Development (DFATD) as salespersons is not what is needed. Not only is this shallow politics, it simply won’t work.
If we are serious, we need to focus on what will really count for a small nation such as Canada in international competition: the skills of our population and our international networks and partnerships.
We had one false start a year ago with a confused Parliamentary Committee report on the private sector and development. The McLeod Group and others criticised it as ‘worryingly ambiguous’, and a further dilution of the focus of our aid on poverty reduction.
If actual policy coherence were not just a bad joke in the new DFATD, the drafters of GMAP in the Trade team might have learnt from talking to their new Development colleagues about real world examples such as South-East Asia or Brazil. Even the DFATD Development team is largely losing these insights as its staff are instructed to focus on small, flag-flying projects instead of transformational change. To effectively trade and invest in the Global South requires first an understanding of the development processes that led those ‘emerging economies’ to emerge, including their new more open politics and governance.
Canada’s human base can be further enhanced, but not overnight. That potential lies latent in our diverse, multi-ethnic human resources, including many individuals from the developing world. However, so far the government has preferred to see them as pawns in a partisan electoral game. Their children – all our children – need good education and a public-policy framework that creates space for innovation and entrepreneurship. They certainly do not want to hear that their personal savings, the remittances they send to help their mothers and cousins, are being touted privately as a convenient justification for further reducing Canada’s aid budget.
We need a better approach to global trade for all Canadians, one designed to benefit the many underemployed young workers. We don’t need a policy crafted for a few privileged companies, many of them actually multinationals, occupying glass towers in Toronto and Calgary.
Rather, we now face a demanding task of rebuilding the networks and partnerships Canada once had. The task is demanding because authentic, productive partnerships are built upon now shattered mutual trust. Old friendships are lost. Regrettably, Canada’s reputation is now that of a major spoiler in international affairs.
The harsh reality is that Canada has only a small pool of competitive companies with already established international credibility. Used to easy sales to the US, most of our smaller businesses won’t relish facing competition from power-houses such as India, Korea and Brazil. Canadian companies will not reject DFATD support; but the wise ones know that this is not enough. Their commercial competence will not be judged by their access to token aid-funding for corporate social responsibility activities. They have to make their own way, building over time a credible presence as globally competitive enterprises. Indeed, to project that image of competence, they do not want to be seen by potential offshore partners as dependent upon Canadian government hand-holding.
What they do want is the supportive cover of being from a Canada with genuine credibility and respect as a ‘soft power’, recognised again as a responsible global citizen. They want a country which is seen as promoting peace, fighting global warming and supporting development co-operation. A free lunch from an ambassador at best breaks the ice, but it will not close a deal.
For their part, developing country governments and their more self-confident private sectors are focused on the quality of the technology or other skills that their Canadian business partners will share. They want real partnership and local jobs, not a bullying insistence on privileged treatment, such as relief from local labour laws, environmental protection, taxes or royalties. Critically, Southern governments and businesses want longer-term commitment from Canadian firms, not flying visits.
Whatever their politics, ordinary Canadians want to be proud of their nation’s global presence. They want more trade and better jobs, but also much more. We were promised policy coherence as the benefit of an otherwise largely unnecessary merger of the Canadian International Development Agency (CIDA) with the Department of Foreign Affairs and International Trade. The McLeod Group fears the new but badly lopsided Global Markets Plan will now impose a seriously flawed approach. It’s yet another policy gambit in which support for global peace and pro-poor development is further diminished in deference to the misperceived interests of a few hundred, often foreign-owned, Canadian corporations.