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The U.S.\u2019s actions in Venezuela this week have reignited concerns about Canada\u2019s reliance on the U.S. for trade and security.\u00a0<\/p>\n
Given America\u2019s increasingly unreliable status as a geopolitical partner, Canada must urgently press ahead with efforts to diversify its ties with other nations, many have said.<\/p>\n
The question is: How realistic are these aims, and is diversification where we should be putting all our efforts?\u00a0<\/p>\n
Since last April, Prime Minister Mark Carney has been travelling flat out to bolster ties with countries of all types \u2014 traditional Western allies, Middle Eastern countries with abysmal human rights records, and the economic heavyweights India and China.<\/p>\n
Carney has said his aim is to double Canadian exports to non-U.S. countries over the next decade. In some ways, this target is surprisingly unambitious for a leader who is nothing if not ambitious. Leading Canadian economist Trevor Tombe has said it should actually be \u201ceasy\u201d for Canada to achieve this goal.<\/p>\n
\u201cWe\u2019ve already doubled the value of [goods] exports over the past 15 years,\u201d Tombe wrote in an article<\/a> for The Hub in October. \u201cDoubling again over the next 10 years requires faster growth, but not insurmountable. Instead of growing at just under 5 percent annually, we\u2019d need to push that up to just over 7 percent per year.\u201d<\/p>\n If you add in exports of services, which have grown significantly over the past decade, it should be possible to double international exports by simply continuing recent trends, he says.<\/p>\n However, Tombe notes infrastructure investments will play an important part in facilitating that growth.<\/p>\n Our journalism isn’t possible without paid subscribers.<\/p>\n If you value a free and fair press, become a paid subscriber today. <\/p>\n We agree. As we wrote in a recent editorial<\/a>, increasing Canada\u2019s ability to export oil and gas \u2014 our most valuable, fungible goods \u2014 is the best way to rapidly diversify away from the U.S.\u00a0<\/p>\n Thank you for being a paid subscriber. Our work would not be possible without your support.\n\t\t\t<\/p>\n Subscribe to Editor’s Picks. Receive our free Saturday newsletter featuring our best stories from the week.<\/p>\n But even then, Canada will remain heavily reliant on America. Currently, Canada sends about 70 per cent of all goods and services to our southern neighbour. Doubling exports to other nations will not radically alter this dependence.<\/p>\n Fundamentally, we are a country that will always have most of our trade eggs in one basket. This is because trade is a function of relationships, and relationships are a function of factors such as shared geography, shared language, shared culture and shared demand for the same things.<\/p>\n Many Canadians abhor President Trump, but Trump cannot undo all the relational factors that make us natural trading partners today and in the future.<\/p>\n In his 1894 novel Pudd\u2019nhead Wilson, Mark Twain wrote, \u201cThe fool saith, \u2018Put not all thy eggs in one basket\u2019 \u2026 but the wise man saith, \u2018Put all your eggs in one basket, and watch that basket!’\u201d<\/p>\n So the question is, what is Canada \u2014 and Carney \u2014 doing to watch our U.S. basket?\u00a0<\/p>\n On the face of it, very little. Carney has been travelling everywhere except the United States, the one destination we cannot afford to ignore.\u00a0<\/p>\n At the same time, Carney\u2019s team has not made clear what all his global hobnobbing aims to accomplish. Perhaps Carney has clear objectives, but if so, those should be communicated to Canadians.<\/p>\n On the security front, diversification is not all that realistic either.\u00a0<\/p>\n