{"id":4217,"date":"2021-05-11T19:00:00","date_gmt":"2021-05-12T00:00:00","guid":{"rendered":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/how-canada-can-thrive-in-a-new-global-trade-landscape\/"},"modified":"2023-11-01T10:40:54","modified_gmt":"2023-11-01T14:40:54","slug":"how-canada-can-thrive-in-a-new-global-trade-landscape","status":"publish","type":"post","link":"https:\/\/www.rbcwealthmanagement.com\/en-ca\/insights\/how-canada-can-thrive-in-a-new-global-trade-landscape","title":{"rendered":"How Canada can thrive in a new global trade landscape"},"content":{"rendered":"\n

Naomi Powell<\/strong><\/p>\n\n\n\n

The world\u2019s supply chains have endured many blows this century: 9\/11, the global financial crisis, the Fukushima earthquake, Brexit. But even in that context, the past year stands out. There was the abrupt shutdown of Chinese factories, the international scramble for masks and PPE, virus-containment measures that grounded airplanes for months, and port logjams. Then, in what\u2019s surely the ultimate symbol of the COVID-era trade chaos, one of the world\u2019s biggest container ships became wedged across the Suez Canal. A team of dredgers and tugboats finally dislodged the massive\u00a0<\/span>Ever Given<\/i>. But there are signs that, in the wake of the pandemic, things won\u2019t be going back to the way they were. As Brian Deese, the top economic advisor at the White House, tweeted after the\u00a0<\/span>Ever Given<\/i>\u00a0<\/span>was freed: \u201cJust another reminder of how imperative it is to ensure the resilience of our supply chains going forward.\u201d<\/p>\n\n\n\n

Three scenarios for Canada’s export future<\/h5>\n\n\n\n
Goods and services export volumes as a share of real GDP<\/h6>\n\n\n\n
\"Three
Historical<\/div> <\/div>
Exports grow 1x real GDP<\/div> <\/div>
Exports grow 0.5x real GDP<\/div> <\/div>
Exports grow 1.5x real GDP<\/div> <\/div> <\/div>

Source: RBC Economics | *Closing the gap between the lowest and highest growth scenarios could boost Canadian exports by a cumulative $1 trillion by 2030.<\/p> <\/div> <\/div>\n\n\n\n

The U.S. is aiming to reengineer supply chains to serve new priorities around national security, workers, the environment and geopolitics. For the Biden administration, these networks are the foundation of a new American industrial strategy designed to reshore manufacturing, invest in electric vehicles, batteries, semiconductors and other clean technologies, and win \u201cthe race for the future\u201d against an ascendant China.<\/p>\n\n\n\n

For Canada, it could be an opportunity to recapture lost ground, according to Trading Places, a <\/span>new report <\/span>from RBC Economics. New Canadian industrial strategies, combined with a stronger strategic trade alliance with the U.S., would give Canada a foothold in the supply chains that will drive technologies of the future. It could help rebuild export muscle that was lost in recent years as Canada\u2019s share of the U.S. market shrank and residential and consumer spending took over as drivers of economic growth. It could also give Canada the chance to revitalize traditional sectors set to be disrupted by the shift to green technologies: autos, energy and metals and minerals that accounted for more than half of exports to the U.S. or $227 billion in 2019.<\/p>\n\n\n\n

Success isn\u2019t assured as other countries vie for a role in the supply lines supporting the world\u2019s largest economy. But Canada enjoys a lot of advantages going in, including deep integration in North American auto manufacturing, a free trade pact with the U.S. and Mexico, and deposits or production of every critical mineral used in the manufacture of EV batteries.<\/p>\n\n\n\n