This year91裸聊视频檚 budget reveals the federal Liberals envision Canada relying more on its allies for trade in the future, economists and geopolitical experts say 91裸聊视频� even if that could result in higher prices or missed opportunities.
91裸聊视频淚t91裸聊视频檚 a reframing,91裸聊视频� University of British Columbia professor Vina Nadjibulla said after the budget91裸聊视频檚 release this week. 91裸聊视频淚t91裸聊视频檚 essentially saying what we91裸聊视频檝e been doing for the last 30 years of engagement is over.91裸聊视频�
U.S. Treasury Secretary Janet Yellen coined the term 91裸聊视频渇riendshoring91裸聊视频� a year ago, saying allies should rely on each other to make supply chains more resilient, and defang hostile actors from taxing or withholding goods.
The Liberals have sent mixed messages in the past year on the extent to which they agree with that approach. Last October, Industry Minister Fran莽ois-Philippe Champagne said Canada was 91裸聊视频渄ecoupling91裸聊视频� from China, but days later Foreign Affairs Minister M茅lanie Joly said she wanted to 91裸聊视频渞e-establish ties91裸聊视频� with Beijing.
The language in the federal budget paints a clearer picture. But some experts warn that the us-versus-them language means Canadian businesses will need to adjust in order to avoid losing out on opportunities with the developing world.
Nadjibulla, speaking at a Wednesday panel held by the Canadian Global Affairs Institute in Ottawa, said Tuesday91裸聊视频檚 budget contains the government91裸聊视频檚 clearest articulation yet of where the world is now.
91裸聊视频淭he language there is that it is a more dangerous world and a more competitive world. And in that world, Canada needs to deepen its connections with its allies,91裸聊视频� she said.
Specifically, the document says trading with other democracies prevents 91裸聊视频渆conomic extortion91裸聊视频� and being 91裸聊视频渧ulnerable to exploitation91裸聊视频� by 91裸聊视频渉ostile foreign powers91裸聊视频� who are buying up Canada91裸聊视频檚 natural resources.
91裸聊视频淒epending on dictatorships for key goods and resources is a major strategic and economic vulnerability,91裸聊视频� the budget reads, echoing comments U.S. President Joe Biden made during his recent visit to Ottawa.
Nadjibulla, who specializes in international security and the Indo-Pacific region, said the rhetoric marks 91裸聊视频渁 big departure from previous budget documents91裸聊视频� in its frankness.
91裸聊视频淓ven more so than in the Indo-Pacific strategy, we see the direction of travel,91裸聊视频� she said.
Mark Warner, a Canadian and American trade lawyer, told a panel that the implementation of 91裸聊视频渇riendshoring91裸聊视频� is already raising questions from his clients.
The automotive and textile sectors have asked him how much material they can use from China before Washington labels a product made in Canada, Mexico or Guatemala as including Chinese content, he warned.
He said that question is coming up for electronics and will likely affect pharmaceuticals, too.
91裸聊视频淭he question of how much Chinese content gets called Canadian is coming,91裸聊视频� he said. 91裸聊视频淚f we91裸聊视频檙e seen as being the back door for China, or whatever, that91裸聊视频檚 going to be more problematic.91裸聊视频�
Warner said Canada91裸聊视频檚 geography means it will always make sense to rely on Washington, even if Ottawa needs to tweak how it treats other countries under a 91裸聊视频渇riendshoring91裸聊视频� policy.
91裸聊视频淚f the Americans are serious about this, then we really have to figure out our way to be in that (space) in a way that91裸聊视频檚 coherent. And that91裸聊视频檚 how we91裸聊视频檒l protect our manufacturers,91裸聊视频� he said.
Yet Mary Lovely, an American economist with the Washington-based Peterson Institute, said the U.S. has been inconsistent in listing who actually qualifies as a friend.
91裸聊视频淭he U.S. language and the rhetoric can be interpreted in a lot of ways,91裸聊视频� she said, adding that this goes back to the Trump administration91裸聊视频檚 steel and aluminum tariffs on Canada, Europe and Mexico.
91裸聊视频淲e saw some confusion in U.S. trade policy over who91裸聊视频檚 a quote-unquote friend,91裸聊视频� she said.
For example, on Friday, the U.S. Treasury Department announced an electric-vehicle tax credit that would apply to goods from Canada, Nicaragua and Oman, but not to those from France and Germany.
Canada is already setting the stage for a cross-border salvo with Washington, announcing in this week91裸聊视频檚 budget that Ottawa is considering retaliatory policies if the U.S. doesn91裸聊视频檛 stop blocking Canadian companies from certain government contracts and green-tech programs.
Still, Washington has successfully been wedging countries against China, such as with language in the United States-Mexico-Canada free-trade agreement that forbids Canada from signing a trade deal with Beijing without U.S. consent. The same language has appeared in recent agreements with Japan and Taiwan.
Last October, the Biden administration announced sweeping restrictions on China91裸聊视频檚 access to semiconductor chips made in any country using U.S. technology, in order to slow Beijing91裸聊视频檚 technological and military rise.
Washington is already talking about similar restrictions on biotechnology and quantum tech, Nadjibulla said. She added that this is causing consternation in Southeast Asia, where countries want to maintain economic links with China, Australia, Europe and the world.
But Lovely said many countries are willing to go along with these rules because they crave American investment and a guarantee they won91裸聊视频檛 be suddenly frozen out of the world91裸聊视频檚 largest economy.
91裸聊视频淭hey fear coming a closure of the American market, and they want to be on the right side of that door,91裸聊视频� she said.
Lovely expresses skepticism about governments combining 91裸聊视频渇riendshoring91裸聊视频� policies with subsidies for their domestic businesses. She said this imposes a necessity to make subsidized companies succeed even when they91裸聊视频檙e inefficient, and positions foreign trade as a threat to local firms.
91裸聊视频淲e can think of these (partnerships) as secure, like-minded, that speak to our values 91裸聊视频� however you want. But they are going to be higher-cost,91裸聊视频� she said.
91裸聊视频淲e do need to be aware of the fact that closing markets will lead our own economies to be less competitive on the export side.91裸聊视频�
She said this will further isolate countries and make it harder to rally global investment to counter climate change.
South Africa91裸聊视频檚 high commissioner in Ottawa expressed a similar view.
In an interview, Rieaz Shaik argued that Yellen91裸聊视频檚 term lets rich countries divide the world without acknowledging the realities of developing countries and the need to address the climate crisis.
91裸聊视频淚t is the most dangerous term in the history of global political relationships, 91裸聊视频榝riendshoring,91裸聊视频� because it91裸聊视频檚 exclusionary. Worse, it says that your non-friend is the other,91裸聊视频� Shaik said in a wide-ranging interview.
91裸聊视频淲e know how apartheid South Africa dealt with the other. They dehumanized us and they removed all our rights to exist. As the other, they could do whatever they want. So I detest 91裸聊视频榝riendshoring.91裸聊视频�91裸聊视频�
In any case, Nadir Patel, a senior strategic advisor with Norton Rose Fulbright Canada, said Ottawa91裸聊视频檚 simultaneous rhetoric around shoring up trade with allies and developing deeper ties with regions such as Southeast Asia will only come to fruition if corporate Canada follows suit.
91裸聊视频淐anadian business needs to step up and do more in other parts of Asia, where we91裸聊视频檙e not active,91裸聊视频� said Patel, a former Canadian high commissioner to India, during the panel.
91裸聊视频淏usinesses need to step up and want to leverage that, and not just kick tires once in a while, but really be out there with a presence on a regular basis.91裸聊视频�
Dylan Robertson, The Canadian Press
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