Despite the recently concluded trade deal between Canada, the United States, and Mexico, Canadian Finance Minister Bill Morneau thinks his country’s exporters need to continue looking beyond the southern border for new opportunity.
Canada sends about 70% of its exports to the United States, accounting for one-fifth of its gross domestic product. That makes the country highly dependent on U.S. trade, a reliance that made the recent trade negotiations to update the landmark NAFTA deal all the more fraught for Canada.
Exporting to the U.S. comes naturally for Canadian companies given it has an enormous, wealthy neighbor that is also close economically, legally, and culturally. But now that the U.S Mexico Canada Agreement, as the updated version of NAFTA is called, is likely to pass, Canadian exporters should resist the temptation to just look South, Morneau said.
“We’re going to have to try and expand trade, diversify trade for Canadian exporters in the context of that,” Morneau said in an interview with the CBC at the Fortune Global Forum in Toronto. “We’re swimming against that tide.”
There is anxiety over what kind of spillover from the current U.S.-China trade tensions could buffet Canada. “The trade tension around the world is real,” Morneau said. Canadian government officials at the Global Forum have repeatedly over the three days touted Canada’s new trade deals, including last year’s pact with the European Union.