After months of pandemic-induced doldrums on the trade promotions front, Asian markets are again trying to garner more business interest from B.C. and elsewhere in Canada.
The one major difference in the current efforts – when compared with previous events and trade shows – is that almost all gatherings are now held virtually via the internet. The Taiwan External Trade Development Council (TAITRA), for example, held its machine-manufacturing event on September 14 through both a YouTube press conference and a virtual-reality kiosk in a bid to secure Canadian business.
At the press conference, TAITRA president and CEO Walter Yeh said Taiwan is banking on the success of its fight against COVID – recording one of the lowest active-case rates in the world – in showcasing some of the technological capabilities that have helped in that fight.
“As the world’s fourth-largest exporter of machine tools and components, Taiwan has averaged US$4 billion in exports in each of the last few years,” Yeh said. “Taiwan boasts a network of more than 1,000 precision manufacturers and 10,000 upstream suppliers; for this reason, Taiwan was able to boost face-mask production during the COVID-19 pandemic from 1.88 million masks a day in January to 20 million shortly afterwards.”
He added that TAITRA’s new campaign is aimed at selling Taiwan’s smart-machine manufacturing capabilities, hoping that its array of new machines driven by artificial intelligence, Internet of Things (IoT) and cloud computing can gain traction with companies throughout North America – including those in B.C.
“Smart machinery is the future of manufacturing,” Yeh said. “Through this press conference, we will demonstrate how companies that have won the Taiwan Excellence Award can help their clients with innovative techniques and solutions to meet manufacturing demands in the post-pandemic era.”
Meanwhile, the Korea Trade-Investment Promotion Agency (KOTRA) – South Korea’s official trade promotion agency – will also host its annual Invest Korea event online November 4–6 in focusing on topics of “smart innovation and safe growth” with an emphasis on digital and sustainable business transformations.
In stating the case for B.C. to pursue more business with South Korea in the post-COVID era, KOTRA officials noted an August report from the World Economic Forum that forecast the country’s 2020 GDP would drop by only about 1% – far lower than the average contraction rate of 7.6% among the 37 member states of the Organization for Economic Co-operation and Development (OECD).
“The data for July show that its export performance has improved notably,” said renowned British economist Jim O’Neill, who wrote the report.
He noted that South Korea’s numbers are not declining as sharply as in the preceding months.
“This improvement may or may not be a harbinger of what awaits the global economy as it recovers from a historic collapse,” O’Neill continued. “But it is clearly another sign that South Korea has managed the crisis well.”
Some observers say, however, that the relatively COVID-resistant economies of markets like South Korea and Taiwan aren’t by themselves enough reason for B.C. to be bullish on doing more trade with those countries.
Hugh Stephens, principal of consultancy Trans-Pacific Connections and a veteran commentator on Canada’s relationships in Asia, said the fact remains that even the countries that have fared best post-COVID are struggling to achieve any economic growth. The one market where Stephens does see growth this year – China – he said will see minimal economic expansion, adding that any attempt to base a B.C. or Canadian economic recovery on China’s fortunes is “not a solid one” given the increasingly fractious relationship between Ottawa and Beijing.
In other markets, recessions have slowed demand – meaning any growth will require a sharply focused approach by Canadian companies to find a specific demand for a specific product in a specific country. Only in cases where customers are well-defined and readily reachable would trade growth be possible, Stephens said.
“It all has to do with demand on both sides of the Pacific, and things aren’t looking too good,” he said, citing a June World Bank report that projected 93% of the world’s countries to face recession-conditions of some kind this year. “Since Canada and Korea have a bilateral FTA, exporters on both sides have no major impediments to growing exports. The key is to match a product with a demand.”
Sean King, senior vice-president of consultancy Park Strategies and an affiliated scholar at the University of Notre Dame’s Liu Institute for Asia, said one aspect of China’s rift with the West is that it now makes more sense for markets like South Korea and Taiwan to fight for more trade ties with North America in filling some parts of the supply chain where Chinese facilities used to dominate.
In that regard, efforts like Taiwan’s push to sell its smart machines make sense, King said. But the key, he added, will be to see whether the governments in those jurisdictions are willing to relinquish their traditional approach of favouring some local companies – because investors and businesses from places like Canada and the United States need a level playing field to even consider getting involved in these markets, given global economic uncertainty.
“South Korea, Taiwan and others can remain attractive to North American companies by staying open and free without showing excessive favouritism or political bias toward domestic players,” he said. “These markets can even cut North American businesses some breaks to attract more of them. For example, Taiwan recently effectively lifted its ban on U.S. pork and beef, thus reigniting speculation over a possible U.S.-Taiwan free trade agreement. Such an FTA would be for security reasons as much as for anything else – but it’d still be good for business.” •