These are difficult days for those who are dependent on foreign trade, particularly Canada.
Our export trade accounted for 31.7 per cent of GDP last year. There are all kinds of trade patterns emerging. First of all, Britain might be leaving the Euro market and that may encourage others to follow.
The Chinese economy, which is the world’s second largest, appears to be slowing. That will have a profound effect on exports and imports, afflicting the world’s foreign trade. Also the Japanese economy is mired still in a multi- year slump.
These events are making it tough for foreign trade enthusiasts, something that is central in the United States election. Globalization and the Trans-Pacific Partnership (TPP) trade agreement are key points. They are central to Donald Trump’s disagreement with globalization. Hillary Clinton was once a backer – this was a major plank in her campaign – but has, subsequently, withdrawn her support on these proposals.
The changing structure of foreign trade is partly to blame for the public’s opinion of distaste for the TPP, making it difficult to ratify any easing of trade restrictions. The big question is how can Canada compete in such diverse world trade? That trade between China and the rest of the world soared for many years but unfortunately, it has declining employment opportunities, by several million, for less skilled workers.
In cities where the workforce was exposed to foreign competition, the participation of the labour force has dwindled since trade with China over many years has resulted in wages and opportunities for the less skilled workers to stagnate. The perception that our political leaders were not doing much to alleviate this dilemma has resulted in the rise of resentment of foreign trade.
Surprisingly, most polls reveal that free trade, in theory, is popular, but when put into practice, the public seems to object to easing the rules for foreign trade. Thus, the TPP is losing its appeal in the United States and here in Canada. There is growing hostility toward more free trade and political leaders are reacting to that. However, any change will be difficult to achieve.
Too, our unions must become co-operative, and better educated workers must be more productive. Evidence the efforts developed by Blackberry, Facebook and Apple, as well many more – all illustrate the potential for knowledge-based workers to be more innovative.
Canada is richly endowed with many resources and in addition, an increasingly knowledge-based economy so that, rather than sending our commodities offshore to be developed elsewhere, our workers provide us with the potential to grow our own GDP through manufacturing, a unique factor in world trade.