The Canadian economy is very much bound to the country’s natural resources. In recent years, natural resources were on a roll. However, since everything that goes up must come down eventually, the million dollar question now is how ready Canada is for the natural resources sector to go bust?
For a country so dependant on exporting raw materials, the name of the game is to find new markets where to sell its stuff. And a way to assure access to new markets is to sign new free trade agreements. But somehow, Canada seems free trade agreement challenged since in the past five years, the country signed only one of them, and with Costa Rica at that! Now, this is not to disparage Costa Rica in any shape or form, but we are talking about the country with the population of only 4.3 million and with the gross domestic product (GDP) of only $20.0 billion.
Plus, Canada’s deal with Costa Rica, well, it is peanuts in comparison to markets that our neighbor has secured. In the same past five years, the U.S. closed ten deals with 15 countries, which have combined populations of 228.4 million and combined GDPs of $2.2 trillion. (No, it is not a typo; the figure of $2.2 trillion is for real!)
So, what is Canada to do? It seems all eligible dance partners had already been snatched. Not surprisingly, the country has gained a compulsive disorder for everything Asian, so it is courting everyone still on the lookout for bilateral agreements from South Korea, Japan, and Singapore to India and China.
Yet, for some strange reason, Canada has forgotten to look much closer, perhaps towards the other side of the Atlantic–Europe! Within the European Union, the combined populations total 450 million, while EU countries pull an amazing combined GDP of close to $12.0 trillion. This second number, the GDP figure, in effect represents 31.4% of all GDPs earned worldwide.
Now, if Canada could get access to Europe’s 31.4% of the world GDPs and combine it with foreign markets it already has access to, the U.S. (28.6% of world GDP) and Mexico (2.5% of world GDP), well, that would be real dandy! OK, dandy may not be the right word, but having access to about 65% of the worldwide GDP would significantly raise Canada’s standing in the global pecking order.
The next question is how much of a possibility is it for Canada to sign a free trade agreement with the EU? Well, it is not so far fetched an idea at all. A lot of ground work in establishing Canada’s preferential treatment within the union has already been done. Going back about thirty years, Canada was the first country to approach the EU. Unfortunately, the idea was put on the back burner when Canada jumped ship and hopped onto the World Trade Organization’s “love boat.” However, if Canada were to get in on the deal with the EU, it could serve as the bridge opening a single free trade zone between Europe and North America. Of course, Canada would not do it (solely) for the love of all mankind. There is plenty of money to be made in the process, too!