Canada urged to revisit old trading friends

An analyst thinks exporters need to pay more attention to Mexico and Japan in light of U.S. and Chinese unreliability

There’s nothing like a beating from your big buddies to remind you to value your smaller, quieter and more dependable friends.

That’s how Carlo Dade of the Canada West Foundation hopes Canada’s farmers, processors and food exporters look at countries like Mexico and Japan now that relations with China and the United States have been strained.

“Are we really looking at all these markets?” wondered Dade, who thinks Canada often takes for granted long-time, reliable buyers of Canadian products.

Not only do Canadian exporters tend to over-rely upon “easy” markets like the U.S. in good times, but when things go bad they can get distracted by the promise of “new” markets.

“We always talk about diversification when things get tough with the easy markets,” said Dade.

While fighting for new markets around the world is a good idea in terms of lowering Canadian reliance on the U.S. and China, gains can also be made inside already-existing markets.

“People overlook Mexico,” said Dade, noting that the country has over 120 million people and has a per capita income larger than China’s.

“Not only do we have tariff preference there, but we also have Class-One rail connections.”

Japan has been a solid, major, dependable market for many Canadian farm products for decades, but many don’t see much potential there because it’s a mature market. However, Dade said it’s wrong to look at established markets as lacking potential for gains.

“We can go deeper with some existing markets,” he said.

“Look for new products (their consumers will appreciate), or are there new uses (for existing products)? Can we create demand, or build demand, for our products?”

Canada now has an advantage over the U.S. in selling to many markets because of the U.S. decision to pull out of the Trans-Pacific Partnership and because it doesn’t have a deal with the European Union.

Canadian exports generally face lower tariffs and other barriers compared to the U.S., so now is the time to double down on increasing sales to these markets regardless of how well established they already are.

Finding new markets that Canada sells little to today is important, but Dade worries that focusing on “new” markets distracts many Canadians from the gains that can be made in places already familiar with Canadian products, and which aren’t the U.S. or China.

“Maybe we could put some of the resources we put into new market access into more effort in existing markets,” Dade said.

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