For the past seven months Trump has been on his soapbox about renegotiating NAFTA and we have all heard him call it ‘the worst trade deal in history’. He has repeatedly threatened to pull out of the agreement trying to add fear into Canada and Mexico in the hopes they will bow down to his demands.
While he has created a lot of waves for the importing/exporting industries of the three countries and added a lot of uncertainty as to what that means for business – maybe he did Canadian businesses a favour. By opening up the renegotiating can of worms it is actually providing a reason to look for other opportunities to leverage.
The reality is that because Trump decided to stir the pot and open up NAFTA for new negotiations, the business climate won’t ever be the same. It is now not a question of IF a new NAFTA will change status quo for organizations, but HOW.
Especially now that NAFTA talks are currently underway and, according to the Toronto Star, ‘there is a negative tone’ to the talks, this is the time to look for new opportunities. Although all 3 countries involved appear to see the necessity of updating the NAFTA, it appears that each country has its own agenda and it will be a while before an agreement is reached. With Trump continuing to say he’ll walk away, and with Canada being seen as a ‘tough negotiator’, the hopes of getting an agreement by the end of the year are unlikely.
It appears that Canadian’s may be seeing new opportunities coming out of the NAFTA renegotiations. For example, when Trump recently threatened to walk away from NAFTA (again), nothing happened to the loonie. This goes hand in hand with a recent Angus Reid poll that suggests that Canadians are beginning to look for partners other than the US for international trade. In the recent poll, Angus Reid has seen a sudden shift from wanting to deepen trade ties with the US, to creating a stronger relationship with the European Union. It appears that Canadians may be seeing this as the next opportunity that Canadian businesses can take advantage of. According to Angus Reid, when Canadians were asked which countries or regions Canada should seek a closer relationship with, the number of Canadians saying ‘continue to focus on the US’ has fallen eight percentage points (from 49% to 41%) since February 2017.
Figure 1: Angus Reid’s poll shows Canadian’s feelings on trade
The poll results will be solidified when the Comprehensive Economic Trade Agreement (CETA) comes into effect on September 21. At that point it will be up to each organization to decide if they leverage this new opportunity or leave it to their competitor to claim the market.
Interestingly enough, two days after CETA rolls out, the third round of NAFTA negotiations will begin in Ottawa. It seems like September will be a busy month for Canadian trade.
By our very nature we like to keep business as usual unless we absolutely have to change, humans tend to be creatures of habit. Especially in successful times, it’s hard to want to take the time to look for additional sources of revenue. Status quo is comforting and familiar, change is uncertain and unfamiliar. The thing with Status Quo, however, is it doesn’t keep you competitive. Just like businesses have had to adapt from land lines to smart phones, in person shopping to online shopping and radio ads to Google Ads, status quo has been disrupted on many fronts, and the NAFTA renegotiations are just another example.
According to the Trade Confidence Index released by Export Development Canada, Canadians are remaining optimistic, with the level of confidence and expectations of trade opportunities jumping 1.6 points from 72.3 last autumn to 73.9. By nature Canadians are optimistic and opportunistic, and since change is inevitable why not grab the bull by the horns and harness that Canadian spirit rather than wait and be forced to react when it might be too late to claim market share?
As Richard Branson once said ‘Business opportunities are like buses, there is always another one coming’. It’s time to take a different bus, experience a different route and get a new perspective on which direction to take by leveraging the power of your team so you can successfully reach your new destination.