With 2018 drawing to a close, it is time for my annual ‘Surprise of the Year’ Commentary. Given the sheer number of shocks experienced this year, it might be a bit too soon to write this issue; there are still two weeks left, and there’s no telling what might happen. A shock-weary world probably hopes to get a break. Assuming relative quiet for the rest of December, can we narrow down this year’s surprise to just one issue?
That’s a tall order; the list of high-impact events goes on and on. Take CUSMA: the negotiations provided high drama that at times had Canadian exporters palpitating. Some were shocked by the inking of the agreement, which followed a stream of high-level acidic rancour. But all along we maintained that there’d be a deal – so we weren’t surprised by the schtick, or the signing.
How about the US-China tariff spat? This is a situation with more serious potential consequences for the global economy. If the measures are a shock, the players aren’t; the US has long held that its perpetual trade deficit was in the crosshairs of this administration. So, is it an impasse? Recent talks at the Buenos Aires G20 meeting seemed to indicate movement. Meanwhile, China’s nascent interest in the CPTPP, a deal that addresses many of America’s trade grievances, adds hope for resolution. Again, the devices are more of a surprise than the direction...
This was excerpted from a 13 December 2018 commentary by Peter Hall, Vice-President and Chief Economist, Export Development Canada.