Policy Matters: 3 Priorities for International Trade

In 2022, imports and exports accounted for two-thirds of our gross domestic product (GDP). That’s why the decisions we make on trade will affect our prosperity, our quality of life and opportunities for Canadian businesses.

Recently, global crises have caused governments to focus on strengthening international supply chains and economic ties with partner countries. This shift presents a significant opportunity for Canada to unleash its trading potential and meet the global demand for essential goods.

We have strategic advantages in areas such as energy, critical minerals, fertilizers and agriculture. But to benefit economically from our natural wealth, as well as fulfill our responsibility to partner nations, we need to be proactive and strategic in our engagement with our trading partners, while also ensuring our trade infrastructure is ready to support an increase in activity.

Canada is the second largest exporter of
fertilizer and the fifth largest exporter of agriculture
and agri-food products in the world.

To make this our moment, Canada should prioritize the following three measures:

1. Strengthen our Strategic Relationship with the United States

At a time when governments and businesses around the world are looking for stability and predictability in supply chains and trading partners, North America — and Canada in particular — could be a leader.

Leveraging USMCA (Canada’s trade agreement with the United States and Mexico) has the potential to strengthen supply chain integration. USMCA’s existing framework provides a solid basis for a “friendshoring” agenda that bolsters North American manufacturing capacity, economic security and overall global competitiveness.

According to the World Economic Forum, friendshoring
“refers to the rerouting of supply chains to countries perceived
as politically and economically safe or low-risk, to avoid
disruption to the flow of business.”

In 2026, the three countries will indicate whether we want to continue this vital agreement. But Canada can’t wait until then to appeal to the United States. A coordinated effort by all levels of Canadian government as well as the private sector will be important to demonstrate to the United States why a continued, strategic and healthy relationship with Canada is important.

For that reason, the Canadian Chamber launched a Canada-U.S. Engagement Plan in February 2024. The plan will provide Canadian businesses with more opportunities to constructively engage with policymakers and business counterparts in the United States through four business-led trade missions to the United States in 2024. You can read about the first one here.

2. Help Canadian Businesses Engage with Partners in the Indo-Pacific Region

Representing four billion people, 40 economies and $47 trillion in economic activity, the Indo-Pacific is the world’s fastest growing economic region.

Canada’s future trade performance will heavily depend on our ability to capitalize on the immense economic opportunities posed by the region. Our partners in the region need Canada to help fill the urgent and growing gap in energy, critical minerals, food and fertilizers.

The Canadian business community can lead the way in being a more proactive and engaged partner in the region. However, ensuring Canada’s success in the region will require that government work collaboratively with businesses in order to address regulatory challenges, manage geopolitical risks, and understand market dynamics and entry strategies. Taking advantage of this opportunity will require the Canadian government to closely consult and collaborate with the private sector in the ongoing implementation of the Indo-Pacific Strategy in to ensure that international trade policies are aligned with business realities.

3. Prepare for Prosperity by Ensuring We Have Reliable Supply Chains and Trade Infrastructure

We have some work to do here at home if we’re to be ready for the increased trade that engaging with the United States and Indo-Pacific region will bring.

If recent major events, like the pandemic, wars, floods, wildfires and labour disruptions have taught us anything, it’s that our supply chains are only as strong as their weakest link.

By twinning rail capacity, increasing industrial lands around airports and ports, and investing in roads, warehousing, and bridge capacity, we can ease the burden on our infrastructure and reduce the economic consequences of climate events and labour disruptions.

The federal government can help bolster trade infrastructure and ensure reliable supply chains by:

• Collaborating with provinces, the private sector, and Indigenous communities to address regional needs.
• Committing to long-term investment through a Canada Trade Infrastructure Plan.
• Expanding abilities to head off preventable threats to supply chains by considering new dispute resolution tools and withdrawing anti-replacement worker legislation.
• Acting to reduce long-standing barriers to interprovincial trade.

The Canadian Chamber’s Work

Our collective long-term prosperity is closely tied to how we engage with the world, which is why the Canadian Chamber is a longstanding advocate of unlocking Canada’s international potential.

In 2023, we assembled our first Gateway to the World (GTW) team. The team is developing and executing on a strategy that will position the Canadian Chamber as the indispensable organization for Canadian companies of all sizes wanting to engage in international policy or global trade and investment.