Export Landscape for 2019

By Jacquie LaRocque

Canadians—from the farm gate to the halls of government—have never been as aware of our export potential nor as committed to the expansion of foreign sales—both in the United States and other markets. Given this, the government has never been more aware of the need to let the Ag sector do what it does best: innovate, sell and lead.

For AMC’s export-driven membership, 2019 will offer crucial opportunities to explore new markets and take advantage of long-standing export successes. Although the United States remains the primary export market for AMC goods, ongoing sales diversification has generated sales in 154 countries, including Australia, China, Chile, Germany, Brazil and New Zealand.

With the 2019 federal election less than a year away, sustaining robust economic growth and creating well-paying jobs in a time of global trade and environmental reflections will be top of mind.

The federal government has made the quest for new foreign markets a top priority, and it has mandated activist ministers to advance “Canada’s trade agenda by pursuing agreements and opportunities that create jobs and economic benefits.”

The much-publicized talks with the U.S. focused the country’s attention on the vital importance of trade. Canadian businesses breathed a big, though tentative, sigh of relief when the new United States, Mexico, Canada Agreement (USMCA) was presented. After grueling negotiations, led on behalf of Canada by Minister of Foreign Affairs Chrystia Freeland, Prime Minister Justin Trudeau, Mexican President Enrique Peña Nieto and President Donald Trump all signed on. The U.S. Congress is expected to vote on ratification in 2019. It will bear paying attention to the outcome and aftermath of the U.S.’ November midterm elections, which may impact the agreement’s finalization and ratification.

With export diversification being a key political imperative, the government is also implementing the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP), which will open doors in the fast- growing Asia-Pacific area, particularly for Canada’s machinery, equipment and farm products. As a result of 14 breakthrough trade agreements, Canadian businesses will have preferential access to 51 countries with nearly 1.5 billion consumers and a combined GDP of more than US$50 trillion as soon as later this year or early next year.

The importance of these opportunities was driven home by the federal government-commissioned economic table on the agri-food sector. It recognized the prime importance of the agri-food industry in Canada’s future economic growth strategy and singled out improved Capital Cost Allowance (CCA) tax incentives as the best way to enable Canadian exporters to compete globally. AMC Chair Richelle Andreas drove this point home to legislators during their fall tour.

Efforts are being expanded on an urgent basis by numerous federal government departments and agencies to offer exporters financing, information, advice and on-the-ground support in foreign centres. For instance, CETA economies will get streamlined help through a dedicated website and contact points, to increase access to 500 million consumers on the continent.

It is heartening to see the Trade Commissioner Service amplified, and the BDC and EDC are more focused than ever on overseas sales.

With the USMCA completed, China has become a renewed priority. The Canadian government is pushing ahead in hopes of beginning free trade negotiations. This would be the jewel in the crown of Canada’s trade diversification agenda. An agreement would create a historic new framework

to support opening more Canadian opportunities in the huge Chinese market on a B2B basis.

The government also looks upon South America as a prime target for diversification. Canada is currently negotiating an ambitious trade deal with the MERCOSUR countries, which includes Argentina, Brazil, Paraguay and Uruguay. It is the world’s fourth-largest trading bloc, representing a combined population of 260 million and a GDP of over $3 trillion. Achieving an agreement would be an important breakthrough.

All in all, it’s an exciting time for export. As entrepreneurs who have always thrived on ingenuity, Canada’s shortline farm equipment manufacturers are well-placed to take advantage.

As Election 2019 approaches, AMC members must continue to ensure Ottawa fulfills its promises and they must engage with their political representatives all along the way. Besides calling for CCA improvements, AMC has recommended that Ottawa pursue more trade deals and encourage increased support for exporters in developing regions such as South America. What our elected officials know for sure is that the sector will be watching.

JACQUIE LAROCQUE

is principal of Ottawa-based Compass Rose Group, a government and public affairs agency specializing in export and innovation. Jacquie is consistently ranked as a Top 100 lobbyist in Canada by The Hill Times. You can find her at compassrosegroup.org