New trade strategy: Canada wants to free itself from dependence on the USA

New trading strategy
Canada wants to free itself from dependence on the USA

Canada has long aligned itself economically with its large neighbor to the south. But the US is adopting an increasingly restrictive course in foreign trade. Canada therefore wants to diversify its trade and is primarily looking to Asia.

Canada wants to expand its relations with Pacific countries and thus loosen its one-sided focus on trade with the USA. This is what the new Indo-Pacific strategy envisages, for which funds of 2.3 billion Canadian dollars (1.65 billion euros) are earmarked, which are to flow into armaments and cyber security, among other things. The plan is to deepen relations with over 40 countries in the Pacific.

The background to the realignment is an increasingly restrictive course taken by the USA in economic relations and growing criticism of free trade. The declared goal of the government of the liberal Prime Minister Justin Trudeau is the diversification of trade relations. According to official September data, the US accounts for 68 percent of Canada’s foreign trade, while China accounts for just 7 percent.

However, China is also perceived as problematic in the new strategy. With regard to the People’s Republic, the 26-page strategy paper states that the rules for foreign investments would be tightened to protect intellectual property and prevent Chinese companies from gaining access to domestic mineral resources. According to the concept, China is a “disruptive power”. Nevertheless, cooperation with the second largest economy in the world is necessary to tackle problems such as climate change or the limitation of nuclear weapons.

New Confederation of States in the Pacific Region

Canada’s move follows efforts by Western countries to counter China’s growing influence in the region. The US launched an informal union of states last summer to strengthen relations with the Pacific island states. The so-called Partners in the Blue Pacific (PBP) also included Australia, Japan, New Zealand and Great Britain. They wanted to promote economic relations between the rest of the world and the Pacific States.

US President Joe Biden has announced a larger US presence in the Indo-Pacific amid attempts by China to expand its own economic and military ties in the region.

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