economy
THE IMPORT OF RISKS THROUGH THE EXPORT OF GOODS British Columbia’s sale of goods to other countries is arguably our most important source of economic growth; risks abound, but the supply chains are sound.
Here in Canada, we have a small open economy, meaning we stand to gain substantially from trade with other nations. It goes without saying that we cannot sustainably grow bananas, efficiently manufacture CPUs, or authentically produce Champagne here in Canada; similarly, other countries want our trees, our rocks, and our animals. This makes for a strong basis for trade. A fundamental tenet of economics is that trade of all kinds, and trade more narrowly defined as being international in nature, benefits the parties engaged in it (at the risk of stating a truism, if this weren’t the case then trade wouldn’t take place). Here in BC, we are also a small, open economy that chooses to engage in a lot of trade, with our international exports of goods accounting for 15% of provincial GDP. With trade flows mattering as much as they do to our economic well-being, it is
comforting that over the past year BC’s international goods exports have grown by $3.05B, with growth averaging $1.03B annually over the past 2 decades; most of this growth has come via increasing trade with the US (export growth of $5.68B between 1998 and 2018) and China ($6.55B). Incidentally, these two countries are locked in a vicious trade dispute with no end in sight and few winners crowned to-date. Should the current tariff tiff between the US and China escalate, elongate, or propagate to other countries (through the adoption of isolationist political philosophies first and through supply chains second), this will harm those economies and ours. While uncertainty abounds around the extent to which current tariff wars will escalate, cooler heads are likely to prevail in the end with trade flows adjusting and normalizing over time. This would be to BC’s benefit.
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