Priority Regions Get Boost in Trade Officials

Priority Regions Get Boost in Trade Officials at Expense of Old Allies
(Embassy) (With Costello Comments)

The government has slashed its trade commissioner ranks in Europe over the past two years, while bolstering its presence in key Latin American and Asian countries, as well as the United States, Embassy has discovered.

The results have garnered mixed reactions from various corners, though respondents overwhelming agreed that Canada is not devoting sufficient resources to its trade and investment promotion efforts abroad. "For me, it is reflective of the bigger picture," Liberal Trade critic Navdeep Bains said Monday, "which is that they cut the funding overall for the department, which means they are really stretched for resources."

For example Nova Scotia and other smaller provinces are seeing a movement towards local produce to support local farming. At the same time this localized type of consumption pattern should stimulate local/global marketing efforts to sell those spare pigs, chickens, and organic materials to emerging countries like Korea with many specialized however small "well-being" type shops.

In the fall of 2005 and 2006, the Department of Foreign Affairs and International Trade compiled for Canadian and international businesses a book containing a list of all trade commissioners posted in Canada and in Canadian missions abroad. The list included the name, title, contact details and area of expertise for each official, including heads of mission involved in trade or investment promotion, trade commissioner assistants and provincial trade representatives. The government has not prepared a similar handbook this year, but does have the most up-to-date information available on its Virtual Trade Commissioner website in the same format.

This virtual trade commissioner website removed my password without notification and upon enquiry I was told by Ingeborg Henn, "because you represent a foreign company you are not eligible for a Virtual Trade Commissioner. We appreciate your understanding in this matter." I wrote a reply asking for consideration and the control and flow of information as it stands at DFAIT left my reply unanswered.

Embassy compiled the lists last week, deciding to use statistics from 2005 to compare to this year because it has only been in the last year that the government has closed four missions abroad and clearly stated its international goals and priorities. According to the listing, the number of trade commissioners Canada has sent abroad increased by 20 from two years ago, up to 932.

Asia as a whole hosted more Canadian trade commissioners than any other region, and saw the largest increase over the past two years, with 18 more added. The country that registered the largest increase was China. Fifteen more were added to the ranks, resulting in the presence of 72 trade commissioners working on the ground.

China has been identified as a priority for the Canadian government as part of its emerging economies strategy. A number of other Asian countries, notably the Philippines and Malaysia, also saw notable increases as the government also focused on Southeast Asia.

Surprisingly, however, is that Canada increased its trade commissioner presence in India by only three to 31, though that increase actually occurred last year. India has also been lumped in with China as a priority.

Perhaps unsurprisingly, the government also increased the Canadian presence in Latin America, adding nine new trade commissioners to the region, including five to Colombia. The Conservative government has come under fire for standing by Colombia's government and promoting an agenda of free trade at a time when the country is still plagued by countless human rights violations, government corruption and the continued paramilitary presence.

Brazil, on the other hand, which has been identified as the region's major economy, saw no change over the past two years, nor did Peru, which the government has also touted as an important element of its Americas strategy.

Despite repeated statements from International Trade Minister David Emerson that Canada needs to diversify its trade portfolio away from the United States, especially given the current economic climate, Canada has devoted nine new trade commissioners to enhancing Canada's largest trading relationship.

Mexico, however, saw no change from two years ago. Four trade commissioners that had been added last year were gone by this year, even though Canada has said it wants to drum up relations with the other NAFTA nation.

Reductions Hit Europe Hardest

In March, the government closed four missions abroad with little advance notice. The consulates-general in St. Petersburg and Milan both economic hubs within Europe, as well as the consulates in Osaka and Fukuoka, Japan, were shuttered. The end result, it is now clear, was a significant reduction in presence in each of those countries. Canada scaled back the number of trade commissioners it has posted in Russia over the past year from 11 to nine, while four were moved out of Japan, leaving 34.

Italy, however, was the hardest hit of all countries in the world, down from 20 trade commissioners two years ago to nine as of last week. Europe as a whole suffered from the reshuffling, losing 15 commissioners over the past two years.

Italian Ambassador to Canada Gabriele Sardo said he was not surprised that his country had lost the largest number of Canadian trade commissioners, or that the government is moving away from Europe. "This can only point to one very simple fact," he said, "that Canada is losing interest in keeping a close look at what happens inside Europe, but rather is focussing on other parts of the world, which we already knew."

Mr. Sardo said many countries are ramping up resources to engage India and China, but would not comment on whether it was a good strategy. "Everyone talks about catching up," he said. "Maybe so much catch up is not necessary, but maybe it is certainly necessary."

In explaining the changes, International Trade spokeswoman Valerie Noftle said in an email that the department "needs to ensure that we are at the right place with the right people and doing the right thing."

"Fundamentally it is about finding more efficient ways to work in support of the government's foreign policy and international trade priorities," she added. "Staffing strategies are developed in terms of recruitment and retention, so that our work force can play a key role in advancing Canada's international agenda."

Funny that my applications to DFAIT for twelve years have gone unanswered.

The department is planning to "better align" its resources in support of the government's foreign and trade policy priorities, Ms. Noftle said. "Like other departments, our annual business plan requires us to examine where our resources are and re-calibrate to respond to emerging demands and priorities. The government is ensuring that these resources are strategically allocated internationally."

India a Missed Opportunity: MP

When shown the statistics compiled by Embassy, Canadian Chamber of Commerce president and CEO Perrin Beatty said he was pleased to see the government devoting more trade commissioners to China and India, in particular.

"This appears to be a reflection of the priorities set out by the government in its Global Commerce Strategy, which we consider a great start to Canada's international strategy," Mr. Beatty said in an email. "The trade commissioners do an excellent job for Canadian companies, and in both of the Canadian Chamber's China and India strategy papers, our members had identified the need for 'more boots on the ground' to increase our bilateral commercial ties."

These boots have been waiting patiently. Actually there appear to be graying areas on them.

However, Mr. Beatty noted that Canadian trade commissioners are still operating out of four offices in China, whereas Australia, "which is doing much better in China than Canada is," has 15 trade offices.
" It is not strictly more people that are needed in these countries," he said. "We also need to open more trade offices in China and India, particularly in the second- and third-tier cities."

I think there is answer: outsource research and consulting to locally situated Canadian expatriates.

Mr. Bains, the Liberal trade critic, said the overall increase of trade commissioners was a positive sign, but that it merely represents "baby steps" at a time when global competition is increasing and Canada is being put on the hot seat.

These baby steps represent Canada's historical trade related risk aversion, an over-reliant complacency in terms of US market share, and domestic shields in the forms of non-tarriff barriers particularly in the educational evaluation and equivalency measures taken in the form of private contracted certification agencies which restrict immigrants from taking jobs for which they are already qualified to do.

He questioned the decision to make massive cuts in Italy and Japan. "These are two very key allies of ours, they are both foreign, mature markets and we need to maintain that relationship," he said. "You can see it's a direct trade off."

Mr. Bains also questioned whether Canada was seeing the benefit of its increased presence in China given frosty relations between the emerging economic power and the Canadian government, and whether border issues with the U.S. are being addressed to ensure the nine new commissioners there are having a benefit. " It's great that we have trade commissioners to promote trade," he said, "but if the product doesn't cross the border, that is something that needs to be addressed."

One thing that stood out for Mr. Bains was the lack of additional resources for India.

"It's a missed opportunity," he said, noting the government has said the country is a priority. "They haven't put any resources behind it. It's all window dressing, it's all photo ops and nothing substantial behind it in terms of increasing the resources. In order to take advantage of the emerging economy in India, you need to have additional trade commissioners and additional resources. Other countries seem to be putting forward additional resources and we seem to be just taking pictures."

NDP Trade critic Peter Julian said his primary concerns were that the government was continuing to put its eggs in the U.S. basket by adding more trade commissioners there, and that the government is focussing on countries with poor human rights records like China, Colombia, Saudi Arabia and the Philippines. "And where they've taken them away from are exactly the areas where we should be looking for growth and trade diversification, that whole list of democracies," he said.

It would be a step forward for Canadian manufacturers to investigate joint-ventures in the North South Korean Gaesong Industrial Complex.

"What the Conservatives have said is we're going to continue to put all our eggs in one basket, except that we're going to enhance our trade support in areas where human rights violations are occurring. And where we're cutting back is where human rights are not a concern and you have vibrant economies."

Mr. Julian also criticized the government for failing to put more resources into trade and investment promotion efforts. "Despite the fact that we've been calling for trade diversification and that Canada needs much more on-the-ground support for its products and services abroad," he said, "what we're seeing over a couple of years, from the old Liberals to the new Conservatives, that there's been a very, very marginal increase."

Again, opening up the virtual trade commissioner website to expatriates willing to do local global consulting would be a powerful step to having more minds thinking about the same difficult problems. Not all of us are government employees or even work for Canadian companies. However in the interests of independent consulting as Friedman remarks in "The Lexus and the Olive Tree" sharing knowledge is everything and the willingness to share it often determines your output, profit, and levels of success.