By Denzil Doyle
Prime Minister Harper is to be congratulated for his efforts to diversify Canada’s international trade so that we are less dependent on the U.S.
The cornerstone of his initiative is the signing of free trade agreements with as many countries as possible around the world. His advisors have obviously alerted him about what would happen to Canada if the U.S. ever becomes energy self-sufficient and does not need our oil, whether it be clean or dirty. They have also likely reminded him that Obama is a protectionist who has goofy ideas of how economies really work. (He obviously studied at the McGuinty School of Economics and majored in windmills and solar panels.)
Harper’s efforts, and the environment in which he is operating, can be looked upon as those of a mother bird who leaves the nest every morning in search of food for the baby birds. However, when he returns he finds that the baby birds have been defecating in the nest all day and that he really doesn’t have anything nice to show to the other big birds with whom he has been cavorting. The baby birds are fighting over things like how many extra worms they should get because they have pipelines running through their corner of the nest, or some of them want to throw their worms overboard and replace them with windmills and solar panels.
The task facing Harper is a daunting one. The first thing that he will learn is that in a branch plant economy like Canada’s, decisions about where its products and services are sold are not made domestically but in the boardrooms of multinational enterprises (MNEs) in New York or Europe and they don’t pay much attention to Canada. They look upon us as hewers of wood and drawers of water and it is going to take a lot of salesmanship to convince them otherwise.
Harper may even ask his advisors why we have been selling off our MNEs and why we don’t seem to be able to replace them with others that are in a position to upgrade our trading capability. He will be told that we know how to develop world-class high technology-based products and services but that we do not know how to develop the governance expertise that is so essential to the success of firms like Nortel and RIM.
The bottom line is that Harper must not only divert some of our trade away from the U.S. but he must replace it with trade that will provide employment for a broader cross section of the highly skilled work force that we have built up over the years. The real battle he is fighting is youth unemployment and free trade agreements are only a small part of the arsenal that he will have to use.
Meanwhile, he might focus some of his efforts at cleaning up the nest and achieving free trade at home. Domestic protectionism sends out a bad smell.
Image: Priyanka’s econ blog
Denzil Doyle’s involvement in Ottawa’s high technology industry goes back to the early 1960s when he established a sales office for Digital Equipment Corporation, a Boston-based firm that had just developed the world’s first minicomputer. The Canadian operation quickly evolved into a multi-faceted subsidiary. When he left the company in 1981, Canadian sales exceeded $160 million and its employment exceeded 1,500. In his next career, Doyle built a consulting and investment company, Doyletech Corporation, that not only helped emerging companies, but built companies of its own. In recognition of his contributions to Canada’s high technology industry, he was awarded an honourary Doctorate of Engineering by Carleton University in 1981 and a membership in the Order of Canada in 1995.
