The June 1, 2011 issue of The Globe and Mail carried part 1 of a 12 part series on export trade and emerging markets. An article based on the views of Peter Hall, Export Development Canada’s (EDC’s) chief economist, reveals some interesting new trends in Canada’s export trade.
Based on an extrapolation of recent data, the percentage of our trade with emerging markets could easily approach 35 per cent, or more, by 2020. Given the poor performance of the economies in our traditional markets, this is a good thing indeed. Our favourite trade partner has been the United States, which absorbed as much as 85 per cent of Canada’s exports. This has now fallen to 75 per cent.
From 2003 to 2007, our dollar rose by eight to nine per cent annually over the US dollar and our total trade activity grew very slowly, by 2.1 per cent annually, on average. While export activity in traditional markets has grown by 1.3 per cent annually since 2008, the growth of exports to emerging markets has grown by 12.3 per cent annually.
Through extrapolation, Hall arrives at a 35 per cent growth rate of exports to emerging markets in the next nine years; however, he believes that “with concerted effort Canadian businesses could accelerate this growth by an additional three per cent annually.” At 15.3 per cent growth “it would take non-traditional trade to half of Canada’s global trade by 2025.”
Hall believes that awareness is the key. “A large share of Canadian firms believe their opportunities in emerging markets are limited,” he says. “If even a fraction of these companies venture into the broader world beyond their traditional markets, imagine the impact.”
The more than 300 CAMESE member firms are well aware of the international opportunities available in the mining sector. They know that of the 10,000 Canadian exploration projects and mining operations, globally, half are outside of Canada, in more than 100 countries. They also know that if their products and technologies satisfy our domestic market, they are highly competitive elsewhere.
CAMESE members are increasing their interest in foreign markets, riding a rising tide of exploration and mining activity in the world. For example, our space in Canada pavilions at this year’s mining exhibitions in Argentina, Chile, Australia, Peru, Brazil and Mexico is up 35 per cent from previous levels at the same shows.
Within the Canadian supply sector, there may be 1,000 companies offering specialized mining goods and services that have the latent capabilities of increasing their export performance. How do we switch on this potential?
EDC is doing its part. Comments like Hall’s in the The Globe and Mail article and the support of EDC on the Canada pavilions organized by CAMESE at international mining exhibitions prove this. Hall cites the Canadian Trade Commissioner Service as an important partner, as it surely is; however, it is currently understaffed and underfunded.
Hall also cites the role of international trade associations. Indeed, 95 per cent of CAMESE’s effort is directed at helping member firms market to the mining world. However, unlike in other developed nations, there are few other sectoral associations in this country that are so dedicated to export trade.
What is missing is federal government leadership to organize a national effort to brand Canadian exports sector by sector. While the government is doing its job in negotiating free trade and foreign investment protection agreements, we are falling behind in the collective aspects of export market promotion.
Individual companies have to do their own marketing and certainly the selling; however, our brand needs something that is more than the “sum of the parts.” Only leadership from Ottawa and collective action can bring this about.
The point is made in another article in the The Globe and Mail series. Stefan Lupke, executive vice-president of Corma, an Ontario exporter of corrugated plastic pipe manufacturing machinery, refers to the need to brand Canada as a “mechanical and technical” leader. “Many of our major projects provide water infrastructure, for which demand continues to grow in India, Africa, China and Central and South America,” Lupke says. “But our major competitors are German companies, so we’re always fighting that ‘Made in Germany’ brand, which is very strong.”
Jon Baird, managing director of CAMESE and the immediate past president of PDAC, is interested in collective approaches to enhancing the Canadian brand in the world of mining.