JOHN O’FEE -- The Real Art of the International Deal

Global trade is a complicated, multi-faceted exercise over which I assert no particular expertise.  I do however, know this much.  The “simple” solutions are never that simple in the end.

Whether we want it or not, Canada has been dragged into a proxy trade war between the United States and China. Donald Trump is a self-described nationalist who favours walls, tariffs and the optics of the strong man. “Trudeau should have solved the softwood lumber issue” some argue. At the same time, China is turning the screws on Canada over the Huawei affair by detaining our citizens, holding up imports of some agricultural products like canola oil.  Some argue Trudeau should be doing more to “stand up” to China and the US. 

While Trump may be easy to mock and caricature, his seat in the Oval Office presents both challenges and opportunities for Canada. Regardless of your feelings about Trudeau, he has done a reasonable job interacting with Trump while not antagonizing him.

Any political observer can see that the Americans have (mistakenly) elected a petulant narcissist to their most powerful office.  However, that is also Canada’s reality and the relationship has to be navigated carefully.

Trump is famously thin skinned and appears to announce national policy on a whim and a tweet.  With Trump seeking attention from supporting states like Alaska, Idaho, Montana lumber tariffs are likely to remain. No Canadian leader is likely to achieve much on this front while Trump is in office. 

It’s a hard fact for forest dependent communities in BC but I think we have to be realistic.  One realistic strategy is to explore new markets for our lumber.   

So ... who else will by our lumber if not the US? 

According to the Export Development Corporation, China is set to surpass the United States as our number one lumber export market.  

Vancouver Sun Article on China Lumber Imports 

Suddenly, antagonizing China doesn’t look quite so attractive for residents of forest industry communities.

As for Canola imports, it’s true that China is exerting political pressure on us by curtailing imports.  At the same time, China’s imports of Canadian wheat are skyrocketing……largely because of its trade dispute with the United States.  China’s imports of Canadian wheat are at a 14 year high and roughly double what they were a year ago.

Financial Post Article on China Wheat Imports 

Canada likely has an important role to play in trying to bridge a gap between the US and China when it comes to trade. Most of that work will be done quietly and behind the scenes.   In the meantime, our diplomats and political leaders need to tread carefully and exploit opportunities where they exist. 

Standing up to a bully sounds like a great strategy, until you realize that their combined economies are roughly 20 times our own.  Perhaps it makes more sense to try to work things out.

John O’Fee ... established a law practice in Kamloops focusing on real estate development, corporate transactions, wills and estates. He served three terms as a Kamloops school trustee, 11 years on Kamloops city council, and was also the CEO of the Tk’emlúps te Secwepemc (Kamloops Indian Band). He is a past chair of the Interior Health Authority, been recognized as a distinguished Alumnus of TRU, selected for a BC Community Achievement Award, designated as Queen’s Counsel, and received the Dean’s Award for Excellence in Teaching.