Opinion: After the CUSMA shakedown, let's strengthen our economy against attack

Now is the time to truly focus on markets where Canada has trade agreements that actually work. Trade diversification will have a significant impact on B.C. with the Port of Vancouver already handling 40 per cent of Canada's non-U.S. trade in goods, writes Stuart Culbertson. Photo by Getty images /Getty Images

Article content

Last week, we watched in horror as our major trading partner attempted a five-alarm shakedown of Canada’s trade negotiating team. Prime Minister Mark Carney wisely rescued the team from the U.S. trade representative’s lair and recalled them home.

Article content

While many are left wondering what happened, the more relevant questions are what now and what next? Is this the end of the Canada-U.S.-Mexico agreement (CUSMA) or the beginning of the final phase of this year’s CUSMA reset?

Article content

Article content

Article content

In his speech on Aug. 22, Carney challenged us all, as individuals and governments, to take to the barricades and “focus on what can control, and build a Canada strong for all.”

Article content

Article content

Before surveying some options for action, let’s remind ourselves what is at stake here. Canada is a trade-dependent economy, with our exports in 2025 constituting 31.3 per cent of GDP. The U.S. is less so — with exports accounting for only 11 per cent of GDP. The U.S. remains by far our largest trading partner, taking 72.5 per cent of our exports, which in turn represents 23 per cent of our GDP. Its ability to wreak economic havoc through hostile trade measures is considerable.

Article content

Seeing the perils of our dependency on the U.S. market, the Carney government has dedicated itself to diversifying our trade — aiming to double our non-U.S. exports by 2035. With many factors at play, we may be beginning to see early indicators that this strategy is working. In 2025, against the backdrop of a slight overall decline in total exports, the share of Canada’s exports destined for the U.S. fell to its lowest level since the early 1980s while the share to the rest of the world grew by 11 per cent.

Article content

Article content

Back to the barricades. What actions can we take in the “Canada Strong” challenge?

Article content

Let’s start with something that is absolutely within our sole control — eradicating internal trade barriers. Earlier this year, the International Monetary Fund published a report that concluded that eliminating internal trade barriers could boost Canada’s GDP by nearly seven per cent over the long run — roughly $210 billion in today’s terms. However, leaving these barriers in place represents the equivalent of a nine per cent tariff on over $500 billion in annual internal trade. The report concluded that “the prize is large. Turning 13 economies into one is no longer just an aspiration — it is an economic imperative.”

Article content

Let’s do it … now.

Article content

It’s time to accelerate trade diversification. Canada has an impressive network of trade arrangements beyond the U.S. and CUSMA — with 14 trade agreements covering 50 countries, including the European Union and Japan. Helping our exporters seize opportunities in these markets should be a top priority. A large role here can be played by the Canadian Trade Commissioner Service, which has been supporting Canadian businesses in their trade pursuits for more than 125 years. Now is the time to truly focus on markets where Canada has trade agreements that actually work.