Today’s Globe editorial provides further evidence of distorted economic reasoning being rolled out to attack Thomas Mulcair.
“Mr. Mulcair seems to long for a golden age of manufacturing and a low dollar, but his longing won’t take Canada anywhere. Not only the dollar but Asian competition has inflicted damage on Canadian exporters.”
The implication seems to be that the over-valued Canada-US exchange rate has little or nothing to do with Canada’s huge and growing manufacturing trade deficit with Asia. But that ignores the fact that Canada’s Asian trade partners – most notably China – effectively manage their currencies against the US dollar to maintain a competitive advantage.
Seen from this perspective, the over-valued exchange rate against the US dollar – which almost all economists see as driven in significant part by rising energy and mineral prices – has impacted not just on Canada-US two way trade, but has also contributed to rising Asian exports to Canada, and very limited growth of non resource exports to Asia. The over-valued Canadian dollar has limited our ability to compensate for a depressed US market by levering off faster Asian growth.
- Canada’s Economic Problem is NOT High Wages (August 16th, 2012)
- Taking Over Nexen (July 25th, 2012)
- When a University Recruits Abroad, Who’s in Charge? (April 20th, 2012)
- Who Wants “Closer” Ties With China? (February 13th, 2012)
- Comparing two carbon bombs: LNG plants vs Enbridge pipeline (February 8th, 2012)