TEAM CANADA 1997 (THE PHILIPPINES)
Canadian, Asian International Trade speech delivered by Mitchell Brownstein
It is a great pleasure to make the following presentation being a member of the Team Canada mission to the Philippines. Our firm has been invited to participate on two previous Team Canada missions, the first in January, 1996 with the Right Honourable Prime Minister of Canada, Mr. Jean Chrétien to India, the second in May, 1996 with the Secretary of State, the Honourable Raymond Chan to China and now on this third mission with the Right Honourable Prime Minister of Canada, Mr. Jean Chrétien as well as all the Premiers for all provinces including Quebec, where I come from, headed by Premier Lucien Bouchard.
Our firm has had the privilege of speaking before The Confederation of Indian Industry and the Federation of Indian Chamber of Commerce in India on our previous mission.
The Team Canada Trade Missions are comprised of both government and business delegations. The government delegation lead by our Prime Minister includes several central government cabinet ministers including most notably our International Trade Minister, Arthur Eggleton, our Secretary for State for Asia-Pacific, Mr. Raymond Chan, our Ambassador to the Philippines, and all of the provincial Premiers as well as a number of local government officials.
The business delegation consists of over 400 business leaders representing the major business sectors in Canada. This Team is the biggest ever foreign trade mission from Canada to visit the Philippines.
The 3 day business program in Manila includes briefing by the Senior Asian Development Bank Officials, business sessions organized by the Canadian Chamber of Commerce and the Philippine Chamber of Commerce and Industry, contract signing ceremonies in the presence of the Prime Minister, Premiers, Territorial Leaders, The Philippine Chamber of Commerce and Industry, Makati Business Club, Philippine Management Association and the Philippine Chinese Chamber of Commerce. In addition, there will be a sectoral working group in the areas of energy and natural resources, telecom and infotech, transportation, environment, financial services, agri-food products, constructions and building products and education and cultural industries.
The program includes plenary sessions in Manila which are (or will) be addressed by our Prime Minister, Mr. Jean Chrétien.
Following discussions between the Philippine and Canadian Prime Ministers and the Team Canada Government Delegation, several Canadian/Philippine bilateral agreements were signed described as part as a major effort to raise relations between our two countries to a new level of relevance and importance.
These agreements are aimed at improving the climate for investments and the climate of business which is tremendously encouraging as it is to the benefit of Canadian and Philipino businessmen wishing to enter into trading partnerships.
Although the Canadian business delegation focused mainly on large Canadian corporations, upon review of Canadian studies and surveys, it has been discovered that there are many small and medium size companies in Canada which have the technology and know-how needed in the Philippines and most certainly tieups can be made, among those Philipino companies similar in size and nature. Unfortunately, we have found from our visits to the Philippines that many small and medium size companies in the Philippines are under the mistaken impression that the costs, complexities and time required do not justify the extra effort needed to explore the Canadian market. In their experience, it is so much easier to do business next door and consequently, they do not try very hard to succeed in Canada and do not devote the resources required.
Canada, which occupies the top part of the North American continent as the second largest country in the world with respect to area. Despite its size, its total population is only 27 million in which the Asian population is 24.5%. Canada's strong economic and liberalized immigration policy has become an attraction in the world for corporate bodies, investors, businessmen and individual immigrants.
Canada is leading in the world economy and has a policy that is welcoming and competitive. Canada is member of the G-7 countries namely the most technically advances countries in the world include, in addition to Canada, the United States of America, Germany, France, United Kingdom, Japan and Italy.
Before entering into any type of business relation with any country, which may be their import/export or collaboration, any businessman would like to know what is the total potential and capacity of the consumer market. I would like to point out at this stage that because of the NAFT Agreement between the United States, Canada and Mexico, any business dealing in Canada will have access to 160 million consumers for business and investment, which will provide a large labour market for individual job oriented immigrants.
The economic growth of Canada in 1994 was 2.5% which was more than the United Kingdom, United States, France, Japan, Italy and Germany. It was the highest in the world and shall to continue to remain higher than the other G-7 countries. However, Growth Domestic Product (GDP) was more than France, Italy and the United Kingdom but less Japan, Germany and the United States.
The inflation rate is one of the key factors that has the strength of the economic situation in any country. In Canada, the inflation rate and consumer products is only 1.8% in the year 1993, which is less than the inflation rate of Germany, Italy, United States and France but more in the United Kingdom and Japan, where the inflation rate was 1.3% and .9% respectively. However, in the third quarter of 1994, the inflation rate was 0% and in the second quarter of 1994, the price actually fell and the economy grew by an annual rate of 6.4%.
In Canada the rate of return on capital in the business sector as the second largest in the G-7 countries, which the second after the United States. Whereas the corporate taxes on the basis of GDP/GMP as competitive, less than Japan, Italy and the United States, it is still more than France, Germany and the United Kingdom.
Because of the various civil economic factors in Canada, facilities available to the businessman and assistance in help given to them, investment in Canada has increased from $68.9 billion in 1982 to $136.6 billion in 1992. However, at the same time, Canadian Entrepreneurs and corporate bodies have made investments outside Canada in order to compete with the international market. However, the net result is that in the year 1992/1993, the net flow of cash was $6 billion from all over the world. Of the total investment in Canada, the highest investment was in the manufacturing industry and the lowest was in financial industries.
There is a general impression that Japan is the United States major trading partner. You will be surprised to find out however, that Canada is really the major trading partner for the United States. Canadian businessmen have captured 20.3% of the U.S. market whereas Japan has captured only 14.8% of the U.S. trade market.
Out of the G-7 countries, Canada has made significant investment and research and development industries. For every 1000 person in the labour force, Canada has 8.2 individuals in the research and development industry. These figures bring Canada ahead of the United States and Italy.
With respect to the number of computers per head, Canada is ranking second in the world, only after the United States of America, but more than the rest of the G-7 countries. The telecommunications system in Canada is the best in the world. In addition, the extraordinary transportation in Canada makes Canada most attractive place for multinational corporations and international businessmen.
With respect to energy, Canada is spending more money in research and development than the United States, France, Germany and the United Kingdom. Canada is a vast area of land and an abundant resources of natural oil. Canada is the number one country in the world in self-sufficiency of oil with a net surplus of 19.1 million metric tones as of 1991. Therefore, based on this fact, the price of natural gas for industry is the lowest in the world.
Due to the high investment in research and development in the energy field, industry Canada has developed one of the most advanced technologies in the industry, which has resulted in the lowest electricity price for industries in the world.
Similarly, the price of gasoline is the second lowest in the world. The life line of every country is its transportation infra-structures which provides service to the business community. Canada has the world's number 1 transportation infra-structure in all areas including railways, road, air and shipping port access.
SOCIAL INFRA-STRUCTURE
Canada has been consistently voted by the United Nations as the number 1 place in the world to live, taking into effect may factors. Firstly, Canada has the second highest standard of living and life expectancy in the world. In Canada, medical facilities are free to all citizens and permanent residents.
The Canadian Government spends 36% of the GDP to train workers in order to provide a highly skilled and educated labour force to Canada's domestic and international business operators. Canada ranks second in the world in this category.
In addition, due to the highest standard of living, environmental controls, clear air and water, and healthy food, Canadian adults have a life expectancy of approximately 77 years, the highest after Japan.
In compared to the United States, Canada is a kinder most peaceful nation. The crime rate in Canada is less than 40% of the crime rate in every category of crime committed against people based on the world average. This is because the Canadian system of education and the social service dictates a certain type of behaviour. In the age group of 20 - 24 year old, 70% of students enrolled in higher education giving Canada the second place in the world with respect to higher education among the youth.
Canada therefore has the highest number of graduates in every major area study, giving Canada the number one position as far as the number of graduates are concerned.
COST OF LABOUR AND SPACE
Administrative and professional labour costs in the major cities in Canada including Vancouver, Toronto and Montreal is less than other major cities in the United States, France, Italy and Japan.
Similarly, the cost of office space in Canada is almost the lowest of the major cities of the world and apartment costs are also lower. However, the average hourly wage rate for skilled workers is an average of $17.2 U.S. which is lower in Germany and Italy but in par with the G-7 countries.
Should all these characteristics of the Canadian economy and our leading place in every area of the economy, you should not be surprised to know that leading multinational companies and U.S. major corporations have their offices in Canada. To name but a few, namely:
- 1. General Motors of Canada
- 2. Ford Motors of Canada
- 3. Imperial Oil
- 4. Chrysler of Canada
- 5. I.B.M. Canada
- 6. Shell Canada Limited
- 7. Canada Safeway Limited
- 8. Sears Canada Inc.
- 9. Amoco Canada Petroleum
- 10. Total Petroleum
In addition to these multinational corporations, there are many medium to large scale size American and European companies having their offices in Canada.
It is therefore not surprising that the United Nations has voted Canada to be the best place in the world to live with the second highest standard of living and second highest live expectancy.
It is also not surprising that the survey carried out by the Geneva based corporation research group for 118 cities, come to the conclusions that 12 cities, four are Canadian in which Vancouver is rated as the number 2 city, Toronto number 4, Montreal number 7 and Calgary number 12.
Canada is the only country in the world with four cities ranking this high on the world basis.
My Recommendations:
Philipino businessmen should be encouraged to go out of their way to show Canadians, in detail, with facts and figures how and why cooperation is in their mutual interest, without taking it for granted that all Canadians know what may seem obvious to experienced Philipino businessmen. One should not assume, even today, that all Canadians are fully informed on the current Philipino environment. Since a number of bad experiences in the past, with bureaucracy, customs, tender procedures lacking transparency, etc., continue to colour the thinking of Canadian businessmen.
The technology that Canadians have to offer and the integrity and capability of Canadians as long-term business partners will make the additional effort more than worthwhile. It would also be beneficial for Philipino companies to adopt Western marketing techniques in their dealings with Canadians and other Western companies to more beneficially demonstrate their capabilities and, in particular, their serious intentions in doing business.
It is also important that Canadian companies and Philipino companies understand each other's tradition of doing business and develop the appropriate strategy for persistence and patience as an essential ingredient in doing business in the Philippines.
Conclusion
The opportunities for Canada/Philipino Trade are enormous so long as both parties work in a spirit of cooperation, understanding and one following a program of orientation.
MITCHELL S. BROWNSTEIN
January, 1997
