For optimists, the economic news at the tail end of 2019 was encouraging; for pessimists, it came with a lot of red flags.
The best news for Canadian trading prospects, perhaps, was the long-delayed renegotiation of a new North American trade agreement.
While the jury will remain out far into 2020 on where and how Canada will benefit from the replacement to the North American Free Trade
Agreement (NAFTA), there is little doubt that removal of uncertainty over whether there would be a replacement helps investment and economic prospects in this country.
Deceleration of trade hostilities between China and the United States following agreement on Phase 1 of a new trade deal between Canada’s two largest trading partners also reduces overall global economic uncertainty.
But neither positive development masks the reality that economic growth is slowing along with declining world population growth.
And neither development guarantees long-term wins for Canada.
Consider, for example, that the predicted business bonanza from Canada’s membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has yet to materialize since the pact came into force in December 2018.
Instead, according to the Asia Pacific Foundation of Canada’s 2019 Trade Tracker, Canada’s exports to the other 10 CPTPP members dropped by 3% during 2019’s first nine months.
The lesson here: reaping free-trade dividends requires persistent legwork.
In the case of the new NAFTA, the deal provides no protection against an unpredictable U.S. president’s trade and diplomatic volatility.
Couple that with the worrying household debt borne by Canadians, the minority federal government’s deficit financing infatuation and what Bank of Canada governor Stephen Poloz has called the “serial disappointment” in global economic growth since the 2008 financial crisis, and Canada’s outlook for 2020 is far from bright.
And it will become far less bright if Canadian businesses are lulled into any false sense of security by the ratification of recent trade deals.
