Canada’s consul general encourages Missourians to look north

Jacob2Even as he was growing up in Canada’s capital city, one aspect of Missouri was present throughout Roy Norton’s early life: the St. Louis Cardinals were always Norton’s father’s favorite baseball team.

“At home, we were conscious of St. Louis in a way that there was no other reason for me to be as a Canadian,” says Norton.

Today, Norton regularly travels to Missouri as part of his service as Canadian consul general. He leads the Chicago consulate’s office, which promotes Canadian trade and investment while working to improve relations in a region encompassing Illinois, Missouri, and Wisconsin.

Through his work, Norton has gained a broader appreciation for Missouri’s place in the world.

“Missouri is certainly outwardly focused and that’s a positive quality for a state that is landlocked,” he says. “I think the state gets it.”

One of the main messages he tries to deliver during visits here is the importance of Canada to Missouri’s economy. It’s far bigger than most people realize. Norton likes to note that 163,800 Missouri jobs depend on trade and investment with Canada.

As consul general, one of Norton’s duties is helping expand those trade relationships. He promotes Canadian exports and facilitates new business connections.

“If a Missouri company is looking to expand its platform abroad, we can help with that,” he says. “If you are interested in research-and-development or innovation partnerships, we facilitate all that.”

Missouri Business recently spoke with Norton about the economic ties between Canada and Missouri.

Norton2

Missouri Business: Your office likes to promote Canada as Missouri’s largest trade partner. What kind of response does that bring from Missourians?

Norton: Usually, it’s surprise. People tend to assume that China, Japan, Germany, or some other much more populous country is Missouri’s best customer. But when you lay out the data, Canada buys more from Missouri than your next four best customers put together, those being Mexico, China, Japan and South Korea.

I think people are impressed and maybe even pleased because Missourians are generally favorably disposed toward Canada. We don’t make too much trouble, and we’re aligned on foreign policy and military goals. So the fact that we trade so much with one another is reassuring to people.

MB: Besides proximity, what else do you think drives this level of economic interaction between Missouri and Canada?

Norton: We speak the same language, our legal systems are the same, and, generally, our business styles and approaches are the same. You don’t need to hire an interpreter for a meeting with a Canadian. There is a comfort zone.

It’s easier to do business with people who are a lot like you.

For companies that are putting a toe in the water as exporters, it’s an opportunity to learn the ropes of freight forwarding, customs, and international payments. But you are doing it with a country where it’s much easier rather than, say, China.

MB: Canada recently signed a new free trade agreement with the European Union. Right now, the United States doesn’t have a similar agreement in place. What is that going to mean for Canada and for the Missouri businesses that operate there?

Norton: The new European Union agreement is state of the art. It’s more comprehensive than NAFTA. In some respects, it’s even more comprehensive than the pending Trans-Pacific Partnership because it’s exclusively between countries with developed economies.

The agreement includes extensive intellectual property protection and extensive protection for investments. Existing tariffs are reduced to zero in just about every manufacturing area. So Missouri companies that want the opportunity to sell into the 27 countries of the EU would be very well situated if they had a presence in Canada.

MB: Today, free trade seems less controversial in Canada than here in the United States. How did the Canadian public become comfortable with the concept?

glovesNorton: Before the Canada-United States Free Trade Agreement—which was the precursor to NAFTA—Canada and the United States had been talking about free trade for more than 100 years. But Canada always got cold feet. You are 10 times our size in population, and we allowed ourselves to be overcome by concerns that we’d get swallowed up.

But we overcame those fears and over time they were proven to be unfounded. We then viewed NAFTA as a small add-on, whereas for the US, it seems to have been cosmic.

That said, our Canadian economy has always been more reliant on international trade than the economy in the United States, largely because you have this huge domestic market and a company in Missouri can sell anywhere within that market. Canadian companies have always looked abroad to sell things.

Compared to the United States, our economy is twice as dependent on foreign trade. Because of that, our governments have tried to establish free trade agreements to make more trade more possible. The European one is big and Canadians are enthusiastic about it. The Trans-Pacific Partnership is also big.

MB: You mentioned your father was a St. Louis Cardinals fan and that gave you an early window into our state. However, for the average Canadian, what is his or her impression of Missouri?

Norton: Are you asking me how fans of the Toronto Blue Jays regard the Kansas City Royals? (laughs)

MB: I’m sure that’s part of it! That’s actually a discussion in Missouri right now—the value of professional sports as a marketing tool.

Norton: It’s true, Canadians certainly know and take seriously any jurisdiction that has a National Hockey League franchise. The states that don’t have an NHL team are less well known.

With baseball this past year, Canadians were playing a lot of attention to the Blue Jays in the playoffs, so they were aware of Kansas City.

That doesn’t mean that in this particular instance they think of Kansas City favorably, given the outcome (laughs).

Personally, I was thrilled when the Royals won the World Series.

Canadians also like to follow the NFL once the Canadian Football League ends in late November. We are certainly aware of the Rams relocating. I have to think it will diminish not just St. Louis, but Missouri. when the Rams are gone.

But, the fact that Missouri has an NHL team, an NFL team and the two teams in Major League Baseball is pretty significant. For Canadians, that sort of underscores the weight of Missouri, I think.

MB: Looking the other direction, I think Missourians are very aware of the recent government transition in Canada. Is the new government going to do things that impact our economic relationship?

Norton: It shouldn’t really make any difference at all to the trade relationship. It’s a pro-business government that’s been elected in Canada and a pro-trade government. It’s very much focused on improving the Canada-US relationship.

In this case, improving that relationship more than likely means going from great to even better.

The new prime minister talked to the president the day after his election and there have been other conversations between the two leaders. So they’re getting on well and the respective cabinet appointments on our side have all had contact with their US counterparts.

MB: Even with the strong relationship between Canada and the United States, we occasionally hear about some lingering trade issues, such as the recently resolved country of origin labeling discussion.

Norton: The corollary of such a massive trade agreement is that periodically there are issues that arise. The country of origin labeling issue was going to result in the application by Canada for tariffs on US exports if it wasn’t fixed.

Your country of origin policy, which derived from your farm bill of 2008, had been found to be illegal by the World Trade Organization since it discriminated against Canada and Mexico.

In a very uncharacteristic Canadian move, we said if it’s not fixed, we’ll retaliate. Fortunately, this was resolved in late December and we didn’t have to go there.

MB: I’d have to imagine those agricultural tariffs could have been harmful in a state like Missouri.

Norton: Overall, the tariff would have been about a billion dollars in value. We previously identified something north of $100 million in Missouri agricultural exports to Canada that could have been affected.

Fortunately, it’s resolved now. It didn’t make any sense for us to be having a mini-trade war in agriculture over something the United States clearly shouldn’t have been doing.

MB: We’ve also heard a lot about Canada’s desire to build the Keystone XL pipeline, which was rejected late last year.

Norton: The integrated North American energy market is obviously only as integrated as there are delivery mechanisms to get the energy to market.

Clearly, the decision to reject the Keystone XL pipeline creates a bit of a problem in that regard. The prime minister expressed disappointment to the President at that decision while obviously he respects the President’s right to make the decision.

That said, it probably means more oil moving by train and that likely isn’t the optimum way to move energy to market. It’s more costly and less environmentally sound.

There are issues we work through, but we do so from the position of friendship, mutual respect, and the desire to find a resolution.

MB: From your perspective as a Canadian who nonetheless has a lot of exposure to Missouri, what can our state be doing to play a bigger, better role in global economy?

Norton: Better? I don’t know. I think you are doing well.

Your governor has made trips to Canada. Some people think those trips are junkets. I happen to think they’re especially important for states like Missouri to put themselves on the map.

Whoever your new governor is will hopefully take up the cudgels and do more of that.

Whoever it is certainly will be welcome in Canada and, hopefully, will come.

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