Gwyn Morgan Misleads on Global Trade
Gwyn Morgan may have made a lot of money for EnCana shareholders, but I have rarely found his economic commentary in the Report on Business to be very well-informed.
The main point he makes in today’s column “New Economic Order Demands New Attitude” is accurate if familiar – Canada participates in the global economy primarily as a commodity producer and importer of manufactured goods from “workshop countries”. (I can’t find the link on the Globe web site.)
But he makes a real blooper in his effort to laud the merits of being a resource exporter in a world where manufacturing production is shifting to China. He states that “Canada is the only G8 country to consistently achieve current account surpluses.”
That is just wildly wrong. Germany and Japan have consistently run HUGE current account surpluses for at least the past decade (about 6% and 3% of GDP respectively in 2010), and French and UK deficits on current account are quite modest. Meanwhile, Canada’s current account went into deficit into 2009, and was not especially large before then compared to those of Germany and Japan.