Canada needs to boost trade to stay competitive, report says
The Vancouver Sun
By Julie Fortier
OTTAWA — Canada needs to step up trade with the European Union and emerging economies such as China if it wants to lead in innovation and achieve higher prosperity, according to a report released Wednesday by the Institute for Competitiveness & Prosperity.
“We are all familiar with the traditional arguments for international trade — it opens markets to our businesses and enables them to achieve scale and specialization; it offers our consumers more variety and lower prices,” Roger Martin, dean of the University of Toronto’s Joseph L. Rotman School of Management and chairman of the institute said in a release.
“But we conclude that trade also stimulates our innovation, economic success, and prosperity. Innovation is driven by a combination of support and pressure, and international trade contributes to both.”
The report, titled Trade, Innovation, and Prosperity, found increased international trade increases competition and creates customers who demand innovative goods and services at low prices, which are a threat to complacent businesses and drive them to be more innovative.
Martin pointed out that although there is fear that more trade with emerging economies such as China could lead to losing Canada’s manufacturing base because of low-cost imports, the institute found that the high Canadian dollar has a more negative effect.
The report said emerging economies are still relatively unsophisticated in their imports, but that will not be the case for long. “To ensure our future prosperity in Canada, we need to engage with these emerging economies and step up our own innovation capabilities . . . Expanded trade with European Union countries will expose us even more to savvy trade partners and, through pressure and support, will help boost our capabilities.”
The institute recommended that Canadian governments and businesses step up their efforts to encourage new trade relations on several fronts. “Our businesses have an opportunity to draw on our recent immigrants’ experience and familiarity with some of our emerging trade partners to develop export strategies,” the report concluded.
© The Financial Post
