World's #1 Trading Nation Must Lead Way to Even Freer Trade
MacLaren, Roy, Canadian Speeches
I had intended to begin this speech with the good news. But everything about Canadian exports today is good news. Canada is well on its way to becoming the greatest trading nation on earth in proportion to population. More than one-third of all the goods and services that we now produce is exported: 37% today compared with only 24% five years ago. We Canadians export three times as much per capita as Americans, twice as much as Japanese.
All that is good news--and there is much else besides, such as the fact that a growing portion of our total trade is now in manufactured goods, services, and value-added products. But the salient questions are, how did we get here, and where do we go from here?
Some would suggest that the relatively low level of the Canadian dollar has been a major factor in the recent record level of our exports. No doubt that has been helpful. The fact is, however, the Canadian dollar declined more against the Japanese yen and the German mark than against the U.S. dollar, but that did not result in a comparable increase in our exports.
Others say that our remarkable export performance is largely the result of a more buoyant U.S. economy. Again, no doubt that has been of great help. Almost 80% of our exports go to that single market. But the growth in our exports to other markets has been accelerating at phenomenal rates: last year there was an increase of about 20% in our exports to Latin America and 25% in our exports to Japan; 41% with each of the European Union and Asia-Pacific, and a quite staggering 47% with China.
How did we get there? Behind the myriad of variables contributing to our export success is the central fact that the Canadian economy -- and Canada in general--has undergone a fundamental transformation, even revolution, in the way that we relate to the world. Today we are more competitive, more productive, and, perhaps most importantly, more outward-looking than at any point in our history. Canada has quite literally turned itself inside-out.
This transformation, moreover, is not merely economic, although productivity and export growth is perhaps the most tangible measure of these changes. The real revolution is psychological. Our collective mindset is now increasingly open, our focus increasingly global. Almost uniquely among the industrialized world, Canadians have come to recognize that the challenge of globalization is not merely to manage technological and geo-political change, but to embrace it. While some in the United States talk of building a great wall against foreign competition, Canadians increasingly talk of building bridges.
Again there have been a number of forces driving this transformation -- our historic search for counterbalances overseas, our domestic reliance on communications and transport, our growing cultural and ethnic pluralism.
For these and other reasons, Canada is emerging as one of the great crossroads of a vast global community. But perhaps the main instrument of change in recent years has been our trade and economic policy: the original Free Trade Agreement with the United States, its expansion to include Mexico, the inauguration of the World Trade Organization, now the expansive regional undertakings in Asia, Latin America, and across the Atlantic, in all of which Canada has been a leading proponent. By bringing down walls with our largest trade partner and increasingly with the world as a whole, we are not only gaining global access for the products and skills of our society -- we are fundamentally altering our society itself.
This was not always the case. At the time of Confederation and until the 1980s, much of Canada's political and economic energy was devoted to building walls against global forces, especially from the south. The rapid industrialization of the United States, combined with the relative economic decline of Britain, saw Canada's economic relations shift increasingly in a north-south direction. …