Trade Agreements – Where to Look Next

What makes an ideal trading partner? Put another way, what countries should Canadian businesses prioritize when seeking long-term growth opportunities? To start, EDC has posted ‘Top 10 Countries for Canadian Companies to do Business with’. This is based on Canada’s existing trade agreements with economies ranging from the massive (EU with a GDP of $16.4Trillion) to the small (Costa Rica with a GDP of $59Billion). Do the two ends of this spectrum really offer Canadian businesses a similar range and scale of opportunity?

In seeking countries to forge economic ties that will most benefit Canadian business in the long term, consider the following:


1) ABSOLUTE SCALE. Economies the size of the U.S. (GDP of $18.5Trillion) are absolutely larger than, say, Costa Rica’s, and consequently should generate more business opportunities.

2) EXPECTED GROWTH. China went from about 2.5% of global GDP in 1985 to 13% in 2015. What countries will make a disproportionate contribution to world GDP over the next 20-30 years?

3) COMPLEMENTARITY. Which countries can complement Canadian skills and strengths to build globally competitive value chains or provide large markets for what Canada can competitively provide?

4) INSTITUTIONAL VALUES. Which countries and societies are already close to Canada in terms of intangibles like business culture, openness and rule of law? Alternatively countries willing to improve standards through transparent institutional arrangements (dispute resolution panels, submitting to multilateral rules, etc.


PWC’s excellent study ‘The World in 2050’ suggests while both China and India should continue growing in economic clout, countries like Indonesia, the Philippines, Vietnam, Turkey and Nigeria could all break into the middle and upper ranks of world economies over the next 30 years. Time to put them on Canadian business’ radars for the long term. Full report here.

©2020 by Centre for Global Enterprise

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