If natural gas opened the door to more trade with Germany, Canada should go through it

Often we struggle with conventional thinking. The kinds of finicky politics that dominate Canada’s public commentary often lecture us about our lack of innovation or insufficient productivity. And not just recently. I vividly remember these rants in the years leading up to the 2008 financial crisis – basically, “Canada sucks over the US” And then kaboom. It was the Americans who blew up the global financial system.

These people are also obsessed with our trade relationship with the United States and have advised us for years to diversify into Asia, particularly China.

Unfortunately, as big as they are, neither client is ideal. The United States, so rich and easily accessible, today tragically evokes the final scene of “Thelma and Louise”, a company rolling down the cliff. Despite the positive surprise of this week’s climate legislation, in a few years it is not strange to suggest the heartbreaking prospect that the country does not exist as we know it or that it is a war zone. . If you run a Canadian business, how much have you calculated that risk?

As for China, of course, it is the mother lode. But to be honest, we don’t trust him. If it’s not Huawei giving us the creeps, an authoritarian regime is kidnapping and detaining our people. It is also very far.

Which raises the obvious. Why don’t we trade more with Europe? It comprises the world’s second largest economy and is our third largest trading partner after the United States and China. But look at that divide: our annual two-way trade with the Americans in goods and services is valued at around $1 trillion, while our two-way trade with the EU is around $89 billion, albeit growing modestly.

Why is that? Of course, the United States is close and the Atlantic separates us from the Europeans. But do we still see Europe as the Old World? Or are we wary of the euro zone, which was supposed to burst a decade ago during the Greek debt crisis? The structure that gave birth to the eurozone indeed has an intrinsic flaw – one monetary policy but several stand-alone fiscal policies.

In 2012, former US Federal Reserve Chairman Alan Greenspan told me in an interview that the euro project was a failed experiment. In the long run, he may be right. However, as John Maynard Keynes, an economist even more famous than Greenspan, said, “in the long run, we are all dead”.

So, in the meantime, why not step up trade with a country like Germany? Our two-way trade with the Germans was $25.8 billion in 2021. Not peanuts, but about a fortieth of our business with the Americans.

There is no doubt that the scars of history are a factor. I grew up terrified of Germany. The Nazi atrocities of World War II were only a generation away and were talked about often throughout my youth. But 77 years after the end of the war and the collapse of one of the most monstrous regimes in human history, Germany is not hiding its past. To walk through the Holocaust Memorial in Berlin is to cry. To contemplate the remains of the Berlin Wall is to be haunted. Today, the country that rebuilt itself after defeat and reunited after the fall of the wall is one of the most successful societies on the planet. It has global brands and is pro-immigration.

Germany is not perfect. He did not create the high-tech heavyweights. But let’s face it, the world needs other things too (Tesla now has a factory near Berlin, one of the most exciting cities in the world). Germany also has a tradition of learning and craftsmanship, instead of thinking that every 18-year-old should be sent to college whether they like it or not. It is an outward-looking, trade-oriented economy. The Germans do not have the advantage of the American market a few hours away, so they trade with a wide range of countries.

From a social point of view, they seem to have an affinity with Canadians and many speak English. Without fail they went out of their way to help my wife and I as we got on and off trains, trams and buses on a recent trip, eager to share information. The exception: gruff taxi drivers who wanted money. But beware of public transport users: there is a pass for nine euros valid for all public transport, everywhere in Germany, for one month. Alternatively, there are e-scooters and shareable e-bikes everywhere.

Unfortunately, given Russian President Vladimir Putin’s criminal invasion of Ukraine, Germany is in dire need of energy. Former Chancellor Angela Merkel’s decision to shut down the country’s nuclear power plants now seems misguided. Germany, in serious fuel shortage, announced that it would return to coal to make sure it has enough energy – not an enticing environmental prospect for a progressive country.

Canada appears keen to supply its ally, a nation of 83 million, with liquefied natural gas through proposed terminals in the Maritimes. If it is built – which is not easy in the current ESG (environmental, social and governance) context – the Germans could buy every drop we can sell them.

And note our East Coast ports. By sea, it takes 9-11 days from Halifax to Hamburg, compared to 15-20 from Vancouver to Shanghai. Halifax and Saint John are part of an integrated North American transportation network. Canadian National Railways reach Halifax, while Canadian Pacific goes to Saint John. Both stretch to the Pacific and have valuable routes across the United States.

Certainly, since 2017, we have had the Comprehensive Economic and Trade Agreement with the EU. With more than one language and several cultures, yes, Europe is complex. But China is not easy either. And despite our huge daily trade flows with the Americans due to NAFTA and its updated cousin, the USMCA (or CUSMA), we have ongoing feuds.

Maybe the Germans should also wear some. With their Chancellor visiting Canada in August, it brings to mind a scene from 1981. I was in a suite at the Chateau Laurier Hotel in Ottawa as then-West German Chancellor Helmut Schmidt was interviewed by Pamela Wallin for CTV.. I had found a two-day job as a gopher at the G7 summit in Montebello (organized by Pierre Trudeau). My role in the play was to provide Wallin (now a senator) with a glass of milk to fortify her for her conversation with Schmidt. It was almost a decade before the fall of the Soviet Empire, so there were still two Germanys – West Germany and the authoritarian East Germany behind the Berlin Wall.

I don’t remember the question Wallin asked Schmidt, but it was about Canada’s vast oil resources, because he answered haughtily, telling him that the world didn’t care too much about “your Alberta.”

Certainly, few people could have foreseen today’s events and Germany’s sudden need for energy 41 years ago. But the late Chancellor might have been less arrogant. And with the reliability of the United States and China in question, Canada could now pay more attention to Europe and Germany, its economic anchor.