Just back from my first Board meeting with the Canadian Chamber of Commerce (representing the Chamber of Commerce Executives of Canada) and aside from being impressed with the focus and growing impact of the national organization, I got to learn a bit more about friendshoring. Haven’t heard of it? Don’t worry; you are not alone.
If you rely on imports or exports (btw all of us rely on trade whether we admit it or not), you might want to learn more. The phrase was coined by US Secretary of the Treasury Janet Yellen in April of this year when discussing next steps for Russian trade sanctions.
Deputy Prime Minister Chrystia Freeland, who recently engaged with the Board of the Canadian Chamber tweeted about it. She had earlier picked up the theme and wove it into a recent speech she gave at the Brookings Institute in Washington.
The phrase attempts to capture a shift in geo-politics and flags a different philosophical approach to trade and international relations at least at the government level. It was once envisioned that trade would be the catalyst through which democracy and human rights would spread, creeping through the trading door, planting the seeds of democratic values that would ultimately flourish. At least that was the theory. Trouble is after three decades of that approach, (perhaps naively) the needle hasn’t moved much in those countries that don’t see democracy, human rights, and/or civil society the same way more western democratic countries do. In fact, one could argue authoritarian regimes have grown, not diminished.
So much for the new world order. In its place would be a more disciplined approach by democratic governments to build stronger trading relations with trusted partners who share the same values, or at least, something along those lines. It is important to point out that this isn’t adopted policy and the musing of the concept comes amid the realization that existing trade agreements, the WTO with all its critics, and sophisticated business relations all remain in place and will continue.
There may not yet be a firm definition of friendshoring or even consensus on what it may mean to existing trade agreements and Canada’s global relations, or even what its impact would be on business but if one thing is certain, you are likely to hear more about friendshoring in the years to come.
READ MORE OF THE DEPUTY PM’s SPEECH
LEARN MORE ABOUT FRIENDSHORING
Contributed by:
Dan Rogers, Executive Director dan@kelownachamber.org