CME is working to help you access new markets and expand your business in existing ones. Our priorities are: removing barriers to trade; creating a level playing field; and helping you succeed everywhere.
Why It Matters
A dynamic exporting sector is critical for our future success as a country. Exports drive growth in output and profitability. They also fuel innovation and new product development, and spark investment in new machinery, equipment and facilities.
Canadian manufacturers face many obstacles competing in global markets and against foreign rivals at home:
- A lack of information about new market opportunities
- The costs and risks associated with new business development
- Unfamiliarity with foreign regulatory and legal frameworks
- Non-tariff barriers and discriminatory practices in other countries
- Non-reciprocal access to government procurement markets
- Dumping and other unfair trading practices from their competitors
- Transportation costs and bottlenecks that prevent timely and cost-effective delivery.
These and other issues are preventing Canadian manufacturers from exporting to their full potential and are undercutting their ability to compete at home and abroad.
On top of that, businesses are having a harder time than ever navigating international waters. Global trade uncertainty has impacted our business relationship with our most important trading partner, and is disrupting well-established supply chains.
Section 232 Tariffs on Steel and Aluminum
The US has imposed tariffs on foreign steel (25%) and aluminum (10%), on the basis of national security concerns. Canada responded with dollar-for-dollar retaliatory tariffs on U.S. steel and aluminum, as well as on several US consumer goods. This dispute threatens manufacturers on both sides of the border.
IMPACT ON MANUFACTURERS
The impact on Canadian manufacturers is significant. U.S. tariffs hurt Canada’s steel producers and disrupted integrated supply chains for steel production. Canada’s counter-tariffs impacted Canadian users of U.S. steel imports, and in turn disrupted their sourcing of a key commodity. These effects filter up through manufacturing supply chains and result in higher costs for producers of a wide range of goods.
CME strongly opposes the unjustified use of US Section 232 measures against Canadian steel and aluminum exports. We were successful in obtaining supports for Canadian manufacturers, including:
- Up to $2 billion in assistance to Canadian steel and aluminum producers affected by US tariffs;
- Targeted relief for Canadian steel and aluminum users affected by Canada’s counter-tariffs; and
- Safeguards to protect against steel diversion and dumping into the Canadian market.
We are continuing to work with the government to simplify the distribution of funds and address any gaps in support. Ultimately, our goal is the complete elimination of Section 232 tariffs and Canadian countermeasures.
Diversifying Canadian Trade
The Government of Canada has shifted its trade policy to focus more on export diversification.
This has resulted in the rebranding of the Minister of International Trade into the Minister of International Trade Diversification and the adoption of a formal trade diversification strategy.
IMPACT ON MANUFACTURERS
Canadian manufacturers are part of regional as well as global supply chains. Trade diversification is positive for businesses if it:
- generates new production mandates;
- opens new markets access gains; and
- results in incremental export growth.
A diversification strategy offers little benefit if it comes at the expense of integrated North American supply chains, or merely substitutes one export destination for another.
CME supports free trade and trade diversification. We are working to ensure that new free trade agreements meet the following three standards:
- They create a fair and level playing field for Canadian manufacturers and exporters and result in reciprocal access to foreign markets;
- They expand Canadian exports of value-added goods and not just natural resources; and
- They do not undermine the existing integrated manufacturing supply chains developed through previous FTAs, especially the NAFTA/USMCA.
We are also working with governments to ensure that SMEs can benefit from these agreements by: improving access to market intelligence; creating better export-readiness programs; and simplifying government supports.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
The CPTPP is a new free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Once ratified, the CPTPP will provide Canadian exporters with access to a market with 495 million people and a combined GDP of $13.5 trillion.
IMPACT ON MANUFACTURERS
The CPTPP will provide Canadian businesses with significant new export market opportunities. When it enters into force, Canada will be the only G-7 country with free trade access to North America, Europe, and Asia-Pacific.
Features of the CPTPP that will benefit Canadian manufacturers include:
- Immediate elimination of tariffs on most industrial goods and consumer products;
- Phase-out of most remaining tariffs over a 10-year period;
- A dedicated chapter on enhancing SME trade; and
- Provisions that address non-tariff barriers, investment, and intellectual property protection.
CME supports the CPTPP and the export growth opportunities it creates for Canadian manufacturers. We are working with the federal government to ensure that businesses are able to maximize the potential benefits of this agreement by:
- Improving access to market intelligence about export opportunities in the region;
- Enhancing government support programs and services;
- Ensuring that non-tariff barriers do not limit market access gains; and
- Lowering the domestic business cost structure to improve export competitiveness.
How CME is Helping
CME is helping pave the way to your export success. Our National Policy Team is working to:
- Lower the cost of doing business in Canada
- Ensure trade agreements create meaningful export opportunities
- Protect you from unfair trading practices
- Help you find new customers
- Make government supports more relevant and easier to access.
MANUFACTURERS’ CHALLENGES TO COMPETE RESULT IN:
LAGGING EXPORTS OF MANUFACTURED GOODS (average annual growth, 2000-2017, in %)