At the IIFA Global Business Forum at Toronto’s Metro Convention Centre, CIBC released a white paper titled ” Spicing Up the Ontario-India Economic Relationship”. On this occasion Benjamin Tal, the Managing Director & Deputy Chief Economist of CIBC World Markets Inc. spoke on the highlights of the research and analysis done and the findings of the paper.
As a listener, what I found heartening was that his findings and recommendations reflected exactly my thinking which I had presented at the FITT National Conference: The Opportunity Triangle. The parallel was unmistakable. Tal’s message was strong and clear: the reality of our trade ties with the US was that we cannot continue to rely so heavily on our southern neighbour. In his foreword to the above report he says “Ontario’s predominant focus on its major and lucrative trading partner in the US has seen it largely ignore other markets and opportunities. While much discussion has taken place over the years about the need for Ontario to broaden its trading partners, until recent times the strength of the economic relationship with the US has precluded any real need to build ties with other markets”.
What he said of Ontario, in the context of the Global Business Forum and the release of the report is indeed true for Canada itself. Juxtaposing the relative slowdown of the US market with the surge of the Indian market, Tal, a key thought leader on Canada and world economy, had some choice words comparing and contrasting what was happening in the two markets. One such comparison that stuck to my mind was “the exhausted US Customer or the enthusiastic Indian Customer”. Make no mistake- he was not saying that we forsake the US market. No, we will continue to have the US as our single biggest trading partner. But the message was that we need to open up to new markets and embrace India as one of the potentially dominant partners of the future.
A quick look at the graph alongside should make things crystal clear- the top 10 US export markets account for just 67% of total US exports while for Canada, just the No.1 market- the U.S. accounts for 76 % of our exports. The next four markets- Japan, Germany, the U.K. and Mexico account for another 10% leaving a meager 14 % for the Rest of the World’s contribution to our exports!
Waxing eloquently on the subject Tal says in the foreword to the report “….However, the rapidly changing global economy is dictating the need for Ontario to broaden its trade perspectives. India should obviously be a top priority in this shift, given the size and rapid growth of the Indian economy and the many cultural and other links between the two jurisdictions. It is clearly in the interests of both economies to see trade and investment climb from current levels.
For India, Ontario has the expertise to provide many of the products and services required as it expands its economy. This includes world recognized capabilities in many of India’s highest need areas — from developing its infrastructure by expanding its power, road and rail grids, to improving the safety of the food supply chain, to expanding educational opportunities for its young population. Given the growing role of the private sector in these sectors and services, India could clearly benefit from tapping into Canada’s stable capital markets.
For Ontario, India’s continued high rate of growth provides many opportunities to expand its export capabilities. Given Ontario’s significant Indo-Canadian population and Commonwealth and English-language ties, the opportunities for Ontario industry are significant. However, the reality is Ontario firms have been slow off the mark in developing potential opportunities in India and are lagging behind many other nations”.
What’s true for Ontario is indeed true for Canada as well. As more opinion leaders like Tal take their message out to the business community, mindsets will change and Canada & India will have much more to celebrate.
For more from the CIBC Report on why Canadian business ought to embrace India, look out for the next post.