U.S. border deal great, but the trade game is global

William Polushin is founding director of the Program for International Competitiveness at the Desautels Faculty of Management, McGill University, and President of AMAXIS, an international business and operational development services firm. The Competing to Win blog series can be found here.

The announcement of the Canada-U.S. perimeter security and economic competitiveness agreement represents a positive step forward in improving the efficiency of Canada-U.S. trade. For Canada: The Trading Nation, that's good news. For Canada: A Nation of Traders, the jury is still out. Lost in the excitement is a stark reality -- we now operate in a 'Made in the World' model, something that is still very much a work in progress in Canada.

As previously indicated in the Competing to Win blog, the path to profits in an increasingly integrated and competitive global economy is complex. It is by no means business as usual. While enhanced border co-operation and the reduction of regulatory barriers should result in significant savings for Canadian and U.S. enterprises engaged in cross-border trade (Canadian Manufacturers & Exporters estimates that Canadian companies could save between $15-billion and $30-billion annually), these same enterprises must still contend with considerable and growing competition from around the world.

This means our companies must not only determine how to best leverage the Canada-U.S. trade and investment environment to create competitive advantage, they must also determine how to structure their operations. From design design to production to marketing to distribution, companies must optimize the use of human, capital, and natural resources -- internal and external to the enterprise -- in Canada and internationally (including the U.S.). This is the essence of a global value chain, which describes the full range of activities undertaken to bring a product or service from its conception to its end use and how these activities are distributed over geographic space and across international borders.

Read full article: The Globe and Mail, December 8, 2011