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new market is the commercial risks they are facing. The role of EDC is rather different, as its focus is highly commercial. Since its mandate was broadened in 1993, the export credit agency has been able to support a limited range of medium-term overseas investments in which there is a clear and rapid export benefit to Canada. It can take an equity partnership position of up to 25% or $10 million in an offshore company with a Canadian investor where the investment is projected to yield a return to Canada of at least twice the EDC stake. A recent review of EDC’s mandate and operations has recommended that the $10 million limit on its investment in foreign projects should be removed. 19 42 It is at the international level that government can do most to help promote outward FDI, by continuing to work for the removal of barriers to investment in recipient countries — including our own. The major focus of Canada’s official involvement in Asia is through APEC, which is working cooperatively toward removing barriers to foreign investment within the region. Considerable progress has already been made on increasing the transparency of investment regulations in APEC economies and providing forums and training to facilitate FDI. With much of the trade liberalization work of APEC passed on to the World Trade Organization, at least for the next few years, Ottawa could afford to increase its attention to investment facilitation. Beyond this, Ottawa could also increase its efforts to negotiate bilateral foreign investment protection agreements (FIPAs) and tax treaties with Asian partners. While tax treaties are in place with all the major economies in Asia except Hong Kong and Taiwan, Canada has FIPAs with only two Asian countries, the Philippines and Thailand, and recently signed a bilateral investment treaty with South Korea covering the telecommunications industry. THE TEAM CANADA EXPERIMENT Since 1994, Canada’s trade and investment promotion in Asia has been built around the high-profile Team Canada missions, led by the prime minister and most of the provincial premiers. Canada Asia Review noted previously that these missions, accompanied by executives from a range of Canadian companies, have gone some way toward raising the rather low profile Canada has in most of the countries visited. The high-level political representation opens doors that might not easily be entered by businesspeople travelling alone, especially the small and medium-sized company representatives who make up the bulk of the missions. The approach of a mission helps move forward deals and decisions that have been stalled in “pending” trays for months. However, it is not clear that the broad-brush Team Canada strategy has the long-term beneficial impact hoped for (which is one reason future missions will have more specific objectives). From the time the Team Canada concept was first tried in the mission to China in November 1994, until 1998, these major traveling showcases visited 12 countries in Asia and Latin America. (In September 1999, Team Canada went to Japan on a much more focused mission than in previous forays, concentrating on high-tech industry. It is too soon to examine the impact of that mission.) A superficial analysis of trade figures from these 12 countries shows that in only four cases — China, Indonesia, Mexico and the Philippines — were Canadian exports up strongly in the year following the visit (measured by comparing export performance to Team Canada targets with export growth to the rest of their region in the same periods). In three other countries, Malaysia, South Korea and Chile, exports showed very modest growth beyond the regional average. In the other five countries targeted, exports were either down or unchanged. However, there was another trade impact: in five countries imports by Canada performed better than our exports after Team Canada left. In India and Argentina, imports rose (again compared with the regional average trend) while exports fell and in Pakistan,
Finally, foreign investment by Canadian companies in the past has been stigmatized as “exporting jobs.” In the short term, a factory closure in Canada by a company investing in a plant in a low-wage country in Asia may seem just that. However, there is plenty of evidence to show that other higher skill, higher paying jobs in areas like R&D, design and management are created in Canada as the overall scale of operations of the investing company grows. 20 In addition, the nature of globalized investment and production today, where integrated operations are spread over several countries, makes the job loss concerns of foreign investment somewhat less than they were in the past. A new plant in Asia is just as likely to be a customer for its Canadian parent as it is to be a supplier. Still, to the extent that there may be short-term social costs accompanying increased outward investment, government has a responsibility to assist with job retraining and other support for displaced workers. 43 Canadian companies have been late starters in the race to expand operations in Asia. Lacking the imperial past of Britain, France or the Netherlands, Canada has not had a portfolio of colonial assets to build on. Although a few Canadian companies like Sun Life or Placer Dome have had operations in Asia for generations, they are the exception. If the fallout from the Asian crisis is indeed creating the “new” Asia that is widely touted — one with greater corporate transparency, better governance and less corruption — Canadian companies will have an opportunity to catch up. If our governments believe, as they say, that our future will be enhanced by increasing economic ties with Asia, they must encourage more Canadian companies to join the race. To do otherwise would ignore the new relationships emerging in the economy of the 21st century. where exports fell, imports fell rather less. Overall, Canada’s merchandise trade deficit with the 12 countries grew a combined $914 million in the year after Team Canada came to town. Although the evidence is far from conclusive — the Asian economic crisis had an effect on the Latin American countries on the January 1998 itinerary — Team Canada does not seem to provide quite the fillip to Canadian exports in the short term that is portrayed, though many of the trade deals inked and contacts made will lead to shipments spread over a longer period than one year. Perhaps one reason for the mixed results is that the Team Canada format is more effective in economies like China or Indonesia (at the time of the visit) with highly centralized business structures, rather than in countries where business is less dominated by government. On the other hand, the figures suggest Team Canada may be having an impact on Canadian DIA. While the gestation time for investments is somewhat longer than for trade deals, and statistical evidence is less readily available, in at least five countries visited — China, South Korea, Indonesia, India and Malaysia – Canadian direct investment rose significantly in the two years after a Team Canada visit. Although the missions have not been billed as investment-promotion activities, the evidence suggests investment opportunities are forefront in the minds of some business participants. Out of 580 specific deals itemized in government information released after 11 of the 12 missions, about 100 were investment transactions. 1 It is not possible to quantify the total value of investments growing out of the missions as no values are reported for many of the deals. However, it seems the Team Canada missions have had some positive impact on our investment in Asia. The logical next step would be to mount a Team Canada investment mission, aimed specifically at promoting Canadian investment in Asia.
Page 1 and 2: asia pacific foundation of canada 1
Page 3 and 4: ○ ○ ○ ○ ○ ○ ○ ○ ○
Page 5 and 6: October 2000, we will hold the firs
Page 7 and 8: OVERVIEW 1 asia in convalescence 7
Page 9 and 10: ○ ○ ○ ○ ○ ○ ○ ○ ○
Page 11 and 12: GRADE ‘98 Inward Investment C- In
Page 13 and 14: THE CHALLENGE OF GLOBALIZATION Unde
Page 15 and 16: The largest pool of investable Cana
Page 17 and 18: enabled Canada to take a stronger r
Page 19 and 20: emoval. However, most of the change
Page 21 and 22: MAJOR EVENTS 2 a year in review 21
Page 23 and 24: stock markets were climbing. As the
Page 25 and 26: six-fold in Thailand. With the exce
Page 27 and 28: the past played a very small role i
Page 29 and 30: it had allowed in recent years. A m
Page 31 and 32: SECURITY BACKTRACK While economic c
Page 33 and 34: Outbreaks of violence in other part
Page 35 and 36: ECONOMIC RELATIONS 3 looking for a
Page 37 and 38: TODAY’S DELAY IS TOMORROW’S LOS
Page 39 and 40: ○ ○ ○ ○ ○ ○ ○ ○ ○
Page 41: to achieve operating efficiencies t
Page 45 and 46: NORTH AMERICAN INTEGRATION 4 too mu
Page 47 and 48: similar to that with the US with on
Page 49 and 50: British Columbia provides a recent
Page 51 and 52: part of US-assembled goods bound fo
Page 53 and 54: ASIAN EXPERTISE 5 hidden advantage
Page 55 and 56: cautioned that “not every Asian C
Page 57 and 58: usiness skills to enhance Canada-As
Page 59 and 60: 6 DEVELOPMENT ASSISTANCE ODA for a
Page 61 and 62: the term “development assistance
Page 63 and 64: The report emphasizes the need to
Page 65 and 66: ASIA PACIFIC FOUNDATION OF CANADA 7
Page 67 and 68: CANADIAN EDUCATION CENTRE NETWORK T
Page 69 and 70: NOTES CHAPTER 1 1. Based on markets
Page 71 and 72: NOTES 5. Research by Tamim Bayoumi
Page 73 and 74: REFERENCES —. Statistics Canada.
Page 75 and 76: REFERENCES United Nations Conferenc
Page 77 and 78: STATISTICAL APPENDIX ASIAN MOTHER T
Page 79: STATISTICAL APPENDIX CANADA’S TRA

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