Global trade a bulwark against economic challenge

Global trade a bulwark against economic challenge

Self-reliance is a laudable attribute in some instances but it’s not one Canadians should consider for themselves, or encourage in others, when agriculture is involved.

We’re exporters. Our economy is structured around building stuff, growing stuff, digging stuff up and then shipping it out. Exports are about 33 percent of our gross domestic product, about $555 billion annually.

When Canadians suddenly realized we didn’t have the capacity to make our own vaccines, it came as a shock to many. When the previous American administration halted personal protective equipment shipments to Canada, it also was disappointing, albeit not as surprising as it would be today.

We have given up on producing many things, from train locomotives to clothing, in favour of having them made more efficiently somewhere that can and will do it for less. It allows our economy to focus on what it does best and allows capital to flow to industries and technologies where we have natural advantages, like agriculture.

Ultimately this reduces our dependence on government investments to make up shortfalls where we fail to compete globally. That creates an economy that is more resilient to wide financial swings internationally.

Canada’s economy remained relatively steady through 2008’s financial crisis. The GDP growth fell to near zero for a few months before bouncing back, and the country largely avoided the mid-decade’s recession. Canada was part of the global 2011 rebound and has maintained fairly steady GDP growth of three to five percent since the early 2000s. As a trading nation, all of our GDP eggs haven’t been in one basket and that helped.

Globally, plenty of governments have found a path to power by suggesting to their voters that they can stop globalization. Narendra Modi in India is currently on this kick. The United Kingdom has exited the European Union and Scotland may soon exit the U.K. Russian leaders wear isolation like a badge of honour and China proudly protects its industries at home while investing aggressively abroad. And no one can forget the “Make America Great Again” slogan.

Nationalism has gripped governments from Poland to Brazil, although these countries haven’t interrupted exports despite their leaders pounding the lecterns of self-sufficiency.

It’s easy to point to a few items of self-reliance and suggest these form the correct pattern for the future. Meanwhile, the bulk of the economy quietly globalizes, unheralded for the prosperity and stability it brings.

Shortages of computer chips, steel, rubber and manufactured bits and pieces are stalling the world’s supply of farm equipment (see story on page 40), but the market will eventually balance the shortfall.

When the 220,000-tonne container ship, the Ever Given, plugged the Suez Canal for a week and put an estimated $12 billion of the world’s daily economy at anchor, the quiet international flow that fails to inspire many voters suddenly mattered — but only for a week.

Western Canadian farmers have always been reliant on the export of raw materials and have long suggested they would prefer more value-added processing here at home. But unlike those in many countries, they don’t take an insular view. Their farm production would still be exported, but in a higher-value form.

The recent spate of Canadian announcements about regional protein processing and canola crushing are long overdue and are caused by foreign demand, largely from the United States.

Canada’s dividends from freer and more open trade are being paid with these new investments. Canadian political leaders need to remind us all from time to time what trade tides are really floating our financial boat and avoid the navel gazing.

Karen Briere, Bruce Dyck, Barb Glen and Mike Raine collaborate in the writing of Western Producer editorials.

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