Can Canada Change?
April 20th, 2008 | Published in Blog, Business, Politics | 4 Comments
Yesterday China announced that it will be diverting much of it’s $1.4 trillion American dollar reserve into more stable currencies “such as the Euro or Canadian dollar“.
Peter Chilf, of Euro Pacific Capital sees the credit meltdown in the US as the beginning of a major overhaul of the American economy.
Much of Canada’s economy is build on “free” trade with the US. But the US seems to becoming more protectionist, and if their economy takes the nose-dive more and more people are predicting, where will that leave us?
I think we need a free trade agreement with the European Union. The EU is a market of nearly 500 million people (50% larger than the us), and their economies are of similar size (US GDP ~ $14T, EU GDP ~ $14.5T).
Canada has been slowly working on more trade with the European Union, but it seems to have stagnated.
While the EU economy is much less consumption driven than the US, the EU populations use less credit, which makes it seem like a much more sustainable trading partner to me. Canada has domestic experience dealing with multilingual markets, and if the north passage opens up, it could make for cheaper shipping to the EU.
I’m not saying cut off trade with the US. We should revisit NAFTA and see if we can’t make it better for everyone, and we should pursue more trade with South America. If the recent oil find in Brazil is as big as some predict, we could have a hungry Portuguese “Saudi-Arabia” down there looking to spend petro-dollars.
April 20th, 2008 at 12:16 pm (#)
I agree completely with the idea that Canada is in a good position to trade with the EU. The idea of the world ‘decoupling’ from the US has not happened with regards to financial markets (witness the decline of stock markets worldwide), but it does not mean it can’t happen from a trade point-of-view.
The stagnation at the government level may have occurred because the Conservative party is in many ways aligned ideologically with the US (lower taxes, less regulation), while the Liberal party is aligned politically with Europe (Healthcare, strong worker protection) - however, they are politicians in the end, and like the Liberals will bend to the will of the people if they want to stick around. And it’s pretty clear that the US way of thinking the last few years has gotten them into a heap o’ trouble… the combination of tax cuts and deregulation have fueled the record high deficits and made the subprime meltdown all but inevitable. All the while, Europe chugs along - so for the sake of our economy we had better start exploring these other markets, (incorrect) ideology be damned.
April 20th, 2008 at 10:55 pm (#)
Admittedly, I’ve been thinking about the idea of seeing if it would be possible for Canada to join the EU. I have to turn it around some, read over the Maastricht Treaty, and see how much the EU’s social and justice systems would work with what we have here.
April 22nd, 2008 at 6:01 am (#)
Exactly. For example, I would have thought the Canadian government would want to partner with booming renewable energy technology in Europe. I really like how the Germans are linking up their solar farms in their South with their wind farms in the North. They’re banking surplus energy by integrating pumping water into a reservoir into the system. Check it:
April 30th, 2008 at 6:53 pm (#)
Germany’s dedication for renewable energy is absolutely incredible. They are truly the leader in this field. I hope many other nations will follow suit. We can all learn from the Germans and we can make our planet a better livable place. The US spends trillions on weapons of mass destruction and too busy trying to start wars and does not know how to finish them. If they were to spend a fraction of that military money, the US can be a world leader as well as a very likeable nationl. If the US set their mind on making war on pollution and global warming the world will greatly appreciate this great nation for centuries to come. Al Gore is the first step to this strategy. He is only one man and we should all join his cause.
John
Toronto, Ontario
Canada