Trends in International Security and Trade (Trade Experts’ Roundtable, 2017)

Abstract

With so many trouble spots in the world, it can be difficult for Canadian businesses to know where to trade successfully and with some assurance of security. Canadian government organizations affiliated with Global Affairs Canada (GAC) need to take a broader view of international security, rather than assessing states in isolation, if businesses are to have the vital information they need. Multinational firms typically have their own risk-management strategies, but smaller enterprises need outside help to get information on the safety and viability of potential export markets. However, none of these GAC-affiliated organizations examines the security risks inherent in the interactions between countries. While GAC focuses mainly on economics, tariffs, language barriers and other factors, the Crown corporation Export Development Canada (EDC) does risk assessments of various countries to determine what level of political risk insurance it should offer to Canadian companies. The Business Development Bank, best known for its domestic work with Canadian businesses, has branched out into the foreign realm too, but only in terms of industry and market research on export assessments. Based on long-term GDP projections, some interesting forecasts have been made that will affect how and where Canadian businesses trade internationally. They will need accurate information on risk and security in order to do so. By 2030, the four largest world economies will be those of the U.S., China, India and Japan. For now, the best bets for Canadian businesses in the short to medium term include China, India and some Southeast Asian countries, although there are some accompanying dangers in these areas. Pakistan, Nigeria and Egypt have the potential to be good markets for Canadian exports, but the current risk from terrorist activity precludes foreign commercial interests. The unstable relationships between countries in the world’s hotspots need continuing assessment and watchfulness. For example, having modernized its navy, China is flexing its military muscles in the South China Sea, building artificial islands there and bullying the Philippines and Vietnam over their competing claims in the region. If the United States were drawn into a larger conflict there, Canadian business interests would be severely compromised. The perennial tensions between the two nuclear powers Pakistan and India pose a threat to commercial activities in that part of the globe, along with terrorist activity within Pakistan and neighbouring Afghanistan. The terrorism risk is also high domestically in the Philippines, while Canada’s NAFTA partner, Mexico, can be a dangerous place to do business, due to organized crime. And while sub-Saharan Africa would appear to offer great potential for trade, those opportunities must be weighed against the spread of Islamic State supporters, other terrorists and corrupt regimes throughout that continent. Canada cannot even count on stability among its traditional trading partners, with Eastern Europe keeping a wary eye on Russia’s moves and Japan under threat from missiles launched by the volatile North Korean regime. What all this means is that the Canadian organizations doing business assessments must expand their scope. So far, they have limited themselves to looking at individual states and providing information about what is going on inside those states’ borders. However, countries do not exist in bubbles. Canadian entrepreneurs need the bigger picture of risk assessment as seen through a broader international lens. When they understand fully the security dimensions of global commerce, they will be in a much better position to make the right decisions about their business ventures.