Majority of Canadian exporters expect protectionism measures to get worse
Tariffs and trade barriers are the top concern reported by Canadian companies looking to grow their business outside of Canada
Ottawa – Trade confidence among Canada’s exporters fell to its lowest level since the European debt crisis seven years ago, according to the latest Trade Confidence Index from Export Development Canada.
EDC surveys 1,000 Canadian exporters twice a year for the Trade Confidence Index. All five components of EDC’s index were down again, continuing the decline seen in the 2018 year-end survey. The slide was broad-based, led by a weaker outlook for international business opportunities, but also reflects softer expectations for the Canadian and global economies.
“Disruptive international trade policies have clearly shaken the confidence of Canadian exporters,” said Peter Hall, chief economist with EDC. “One third of respondents are already negatively impacted by protectionist measures now in place, and an overwhelming majority sees no resolution of major global trade issues within the next year.”
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Tariffs and trade barriers are the top concern reported by Canadian companies contemplating growing or maintaining their business outside of Canada. More than one third (34%) of the survey’s respondents say protectionism is affecting their export and international investment strategies, while a similar share (31 %) say the U.S.-China trade dispute is negatively affecting their export and investment activities.
Looking ahead, few Canadian exporters said they expect any respite. In fact, more than 90 % of respondents either said they expect protectionism measures to worsen (47 %) or stay the same (45 %) over the next 12 months.
And although the push for diversification has waned since last year, Canadian exporters are still contemplating new markets, with many respondents saying they’re looking to take advantage of Canada’s new trade deals, according to the survey. To this end, 18 % said they’re planning to expand their exports to the European Union, which is covered under the Comprehensive Economic and Trade Agreement (CETA); while 15% said they’re looking at countries in the Asia-Pacific, which are covered under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Respondents who said they were planning to export to new markets dropped to 50% from more than 60% a year ago, reports EDC. The share of those who said they plan to invest outside of Canada dropped to 11% from 20% a year ago.