Future NZ scenario? – BC export diversification plan
Wednesday 24 Apr 2019
BC's latest trade mission to Asia appears to heed the advice of Asia-Pacific economic observers to diversify beyond the United States and China, its two largest trade partners.
Government officials have admitted that China will be skipped in the province’s trade mission to Japan and South Korea in part because of Ottawa’s strained relationship with Beijing following the arrest in December of Huawei Technologies Co. Ltd. CFO Meng Wanzhou. But they added that the pull factor from Japan – especially following the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11) – played just as big a role. “It recognizes that trade diversification is pretty important these days,” said Jobs, Trade and Technology Minister Bruce Ralston.
Japan and South Korea are BC’s third- and fourth-largest trade partners, respectively. BC’s exports to Japan reached $4.5 billion in 2017 and accounted for 38.5% of Canada’s exports to the world’s third-largest economy.
The province’s 2017 exports to South Korea were valued at $2.9 billion, which was 55% of Canada’s total exports to that country.
Officials announced last week that Ralston and BC Minister of State for Trade George Chow will visit the two countries March 16–22 but skip the traditional third stop on the East Asia itinerary in China.
They were quick to point out that the trade mission is the first Canadian provincial delegation to travel to Japan since both countries ratified the CPTPP. The 11-country trade bloc came into force on December 30.
Many trade observers have said BC needs to diversify trade away from the US and China because President Donald Trump’s protectionist administration and China’s hardline stance on Canadian trade following Meng’s arrest have thrown BC’s heavy reliance on those two markets into question.
But Yves Tiberghien, director emeritus of the Institute of Asian Research at the University of British Columbia, said businesses also need to take advantage of the rare opening in the Japanese market the CPTPP provides for Canada, which had been trying to secure a free-trade agreement with Japan for two decades.
The key, Tiberghien said, is that the United States backed out of the TPP two years ago, which has provided Canada with a window of tariff advantage this year – before Washington re-enters free-trade negotiations with Japan.
Tiberghien added that Tokyo has been “extremely friendly” to the Canadian market in the last year.
“You have access from government; you have access from the private sector. This is the year to do business with Japan.”
Sean King, Park Strategies senior vice-president, echoed that view. The former US commerce official said many traditional US allies like Canada and Japan are increasingly looking to each other in the face of the Trump administration’s hostility to multilateral trade frameworks.
King added that he hopes to see more trade links built along the lines of geopolitical alliances, similar to what was traditionally the case globally.
Source: Business in Vancouver
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