Shifting Stateside? Think About It…

July 27, 2017

The stakes are high. For some, they’re about as high as they get. Tough talk south of the border has Canadian exporters worried that if they don’t relocate to the US, they will lose their sales there. These fears are not made up; they are real. And they are being validated by US buyers who have bought in to ‘America first’ thinking. All year exporters have been asking me what I think they should do. Clearly, every business situation is different, and the answers have depended on the particulars of the situation. But is there a common response, a set of guidelines that every firm feeling pressure can consider?

Before getting to the answer, a bit of context: the US is still overwhelmingly Canada’s largest customer, and by far the largest international recipient of Canadian direct investment abroad. While some characterize this outward investment as bad for the Canadian economy, believing that the money would be better spent here, EDC Economics has always viewed this as a necessary element of integrative trade – an efficient, business-directed expansion of supply chains globally that permits our enterprises to be efficient on a world scale. Without this, sales would at the least be impaired, and at worst, non-existent.

This practice has in fact not hollowed out the local economy, but has accompanied a dramatic diversification of Canadian sales to markets all over the world. In a number of industries, it has enabled Canada to achieve a scale of operation and specialization that would be unlikely if simply confined within our own borders. If left free to make efficient decisions about global activities, successful businesses will make the right decisions.

This was excerpted from a 27 July 2017 commentary by Peter G. Hall of EDC.


Topic(s): 
Canadian Economy & Politics
Information Source: 
Canadian News Channel
Document Type: 
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