British Columbia

Is B.C. vulnerable to Trump's attack on free trade?

Donald Trump's election victory is raising questions about how his anti-free trade policies could impact the economy of British Columbia.

B.C. sends only half its exports to the U.S., but that might not be enough to protect us in a global trade war

U.S. President-elect Donald Trump has frequently called the North America Free Trade Agreement a 'disaster' and has promised to scrap or renegotiate it. (Mike Segar/Reuters)

Donald Trump's election victory is raising questions about how his anti-free trade policies could impact the economy of British Columbia.

During his campaign, Trump repeatedly called the North American Free Trade Agreement a disaster, and promised he would re-negotiate it if elected president. He's also pledged to back out of the Trans Pacific Partnership trade deal.

Iain Black, the president of the Vancouver Board of Trade, says B.C.'s efforts to diversify the economy will pay off if that's the case.

"We are fortunate in British Columbia that over 50 per cent of our trade is now done with [countries] other than the United States of America. That has been a very deliberate effort on the part of our provincial leadership over the last 10 to 15 years."

In fact, in the 2016 budget Finance Minister Mike de Jong noted nearly 52 per cent of B.C.'s exports are sent to the U.S. while 36 per cent of B.C.'s exports are sent overseas to Asia, 12 per cent are sent to other nations.

Ontario, on the other hand, sends over 80 per cent of its exports south and Alberta's energy sector is virtually tethered to the U.S., sending over 87 per cent of its exports south of the border.

"We're well positioned to withstand changes to NAFTA."  said Black. "At the end of the day we desperately hope that is not the case."

Collateral damage in a trade war

But economist Helmut Pastrick says even if Trump does not target Canada or B.C. directly, we could still suffer collateral damage in a global trade war.

"It is conceivable that if we take him at his word those trade deals are in jeopardy," said Pastrick. "There will be potential tariffs slapped on imports coming in from Mexico, China and perhaps other countries to reduce the trade deficit.

"I understand that he does have considerable power to negate some of the trade deals. We could see a substantial deterioration in global trade and hence economic activity."

But commentators raised doubts even with a Republican Senate and Congress that Trump will actually be able to dismantle trade deals like NAFTA.

"I think that you have got to remember that Donald Trump is offside with his own party on a number of significant issues," said Michael Meneer, a member of Democrats abroad in Vancouver.

"It is an existing treaty and you can talk about wanting to renegotiate NAFTA but to go backwards and renegotiate that is not going to be easy."

Build a 'solid relationship'

Meanwhile, Canadian politicians are pledging to work with the president-elect to keep trade flowing.

"Canada has no closer friend, partner, and ally than the United States. We look forward to working very closely with president-elect Trump, his administration, and with the United States Congress in the years ahead, including on issues such as trade, investment, and international peace and security," Prime Minister Justin Trudeau said in a statement.

B.C. Premier Christy Clark also issued a short statement this morning congratulating Trump on his victory.

"The United States is a close friend and partner of British Columbia. Alongside the Government of Canada, we will work diligently and with determination to ensure we protect and grow the relationship that is crucial to working families in our province on issues like free trade and a new softwood lumber agreement.

In Vancouver, Mayor Gregor Robertson said it was too early to tell what the impact of the result would be.

"I think the U.S. and everyone connected to it have a lot of healing to do right now," he said. "I think at this point we just want to make sure we're supporting everyone who's been surprised and upset through the election process."

Robertson said he was heartened by some of the conciliatory language in Trump's first speech as president-elect, and hoped it would lead to "a new day" and healing.

He also denied telling outspoken former Major League Baseball pitcher Bill "Spaceman" Lee that he would grant him refugee status if Trump won.