Fresh from his trip to the World Economic Forum in Davos, Export Development Canada’s President and CEO Benoit Daignault says Canada is in a unique position to capitalize on what’s happening now globally, even if that means wrestling with the protectionist sentiments so prevalent in nations such as the U.S. and Britain.
“Canadians are smart, we’re innovative and we have a fabulous brand overseas,” Daignault said after meeting several international clients as well as the CEOs of multiple Canadian companies. “People like to deal with us and I think we can be a wonderful bridge between various parts of the world. I really do think we have a unique value proposition that is always very strong, and even more so these days.”
Though attending the World Economic Forum doesn’t usually generate specific business, Daignault said it’s important for Canada to attend the Davos-based convention because it keeps our country on the world’s radar.
“It’s also a good place to get perspective and take stock about how others are feeling about the issues,” he said. “It’s a chance to sit down with clients and find out what’s on their minds and what’s on the horizon for them.”
Getting feedback and taking the pulses of world traders, however, is definitely something that is done at Davos. He said some CEOs he spoke with find the protectionist sentiment of the Trump Administration “very concerning” while others see it as “an opportunity to do more and further expand.”
Daignault said there was also much talk about the void that will be created if U.S. President Donald Trump follows through with his protectionist agenda. To that end, he noted Xi Jinping’s speech, which presented China as the champion of free trade and openness. Xi had some Davos-goers comparing him to Barack Obama.
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“Xi was really the promoter of global, international, and free trade,” Daignault said. “It’s like there is a space left by the U.S. and China was trying to fill it. It was interesting to see that China-U.S. dynamic.”
He also attended a panel on Brexit that featured some Oxford University academics and the Chancellor, the take-away from which was that there’s much tension in the U.K. over Brexit.
“There was a lot of internal politics and tension about how they’re going to successfully achieve an exit from the European Union in an orderly fashion,” he said. “My take is that there’s still lots of work to be done.”
On the protectionist front, he noted that those attending the World Economic Forum have a good understanding of what’s actually causing leaders such as Trump to retrench. And it’s not ultimately about global trade.
“People assume there is an inverse relationship between trade intensity and employment. In addition, trade creates wealth, but that wealth has not been necessarily widely distributed,” he said. However, “people point at trade, but trade isn’t the issue; technology is. The problem isn’t that companies optimize production and gain market access by going to different places around the globe. Rather, the problem is that you now have technology using 50 workers where you used to need 200.” If those workers have no ability to develop new skills, it becomes a source of social tension.
He said everyone at Davos appeared to be aware that protectionism isn’t going to change that fact, “but nevertheless, there’s a lot of traction for the dialogue that says we’re going to fix this with protectionism. The root cause was well understood at Davos, but that doesn’t mean that’s a reflection of what’s happening in the rest of the world.”