Why Mexicans Don't Drink Molson. Andrea Mandel-Campbell

Europe has been a beachhead for some of corporate Canada’s most aggressive international forays, including Alcan’s $4 billion acquisition of French aluminum giant Pechiney in 2003, Canadians on the whole have taken a laissez-faire attitude to Europe. As the Americans and Japanese scramble for position and the eu becomes increasingly preoccupied with its growing membership and the rise of China, Canadian companies have hung back like awkward teenagers waiting to be asked to the prom. Europeans, as a result, are often left scratching their heads, wondering why the Canadians bother showing up at all.

      “Canadians are perceived as very friendly, but we don’t know what they are up to. What are they here for? What do they want to achieve? They don’t make any effort. They wait, like in the old days when women expected to be approached by men,” said one European businessman. “Things have changed. Even women don’t go for that anymore.” Apparently, neither do the Europeans. “We can tolerate that attitude from the U.S., but not from an average-sized country like Canada. You are bound to lose.”

      Nowhere is Canada’s losing record more evident than in Latin America. In a rare burst of foresight, the Canadian government led a series of Team Canada trade missions to the up-and-coming region in the early 1990s in a bid to pre-empt American hegemony by parlaying Canadian goodwill into a first-mover advantage. As a result, Canada signed a free-trade agreement with Chile in 1996, six years before the United States did. Nevertheless, Canadian exports to Chile have stagnated to 1994 levels, as they have in almost every country in the region.

      At the same time, Canada’s trade deficit has grown. All told, it exports less than 1 per cent of its merchandise trade to South America and the Caribbean. The lacklustre trade has been mirrored by a mass exodus of some of Canada’s biggest companies, including Bell Canada’s (now defunct) international wing, bci; Quebec cellular group Telesystem International Wireless; Alberta pipeline companies Nova Gas and TransCanada PipeLines; and even Scotiabank in Argentina. Many left the region with their tail between their legs.

      Canada’s biggest retreat has been in Brazil. Exports to the sprawling country have been declining since 1997 as a $300 million trade surplus was converted into a $2 billion deficit in 2005. Sales to the world’s fifth-most-populous country represent just a quarter of 1 per cent of Canadian exports.

      James Mohr-Bell, executive director of the Brazil–Canada Chamber of Commerce, says two-way trade, while edging up in favour of Brazil, remains “ridiculously low.” The Brazilian businessman has watched in frustration as Canadian companies remain “on the sidelines” while other foreigners, shrugging off currency devaluations and political volatility, have snapped up privatized state assets and invested in infrastructure projects. Although Canadian direct investment has cautiously expanded from $6.7 billion in 2000 to $8 billion five years later, overall foreign direct investment in Brazil has ballooned from us$40 billion in 1992 to over us$236 billion⁹ a decade later. “Canada has lost a lot of position. It used to be the sixth- or seventh-largest investor in Brazil, now it’s twelfth or fifteenth,” says Mohr-Bell. “As far as Canada is concerned, Brazil has just been forgotten, left aside. It was never exploited by Canadians to its potential.”

      But perhaps the most worrying omission in the Canadian trade calculation is Asia. By mid-century, the region is expected to be home to three of the world’s six largest economies, yet Canada is barely a footnote in what is being touted as a historic changing of the economic guard. Canada’s share of Asian imports has almost slipped off the charts, from 2.88 per cent in 1988 to 1.06 per cent in 2004 in the wake of near-negligible exports and ballooning trade deficits. In 2004, Canada trailed Chile as the eighteenth-largest foreign investor in Southeast Asia.

      While shrinking exports to Japan, a long-time trading partner, and Korea are cause for worry, it’s the seeming indifference to China that’s most alarming. As the world scrambles to feed China’s ravenous economic appetite, Canada directs less than 2 per cent of its exports to what has been the globe’s fastest-growing economy for the past decade. Not surprisingly, Canada lags behind every other major country in export growth to China.¹⁰ In fact, in the first half of 2006, exports actually contracted by 8 per cent compared with the same period in 2005.

      Canada’s meagre and diminishing share of Chinese imports is matched by minuscule direct investment. By 2005, Canadian investment in the world’s most populous country barely topped $1 billion, representing 0.2 per cent of all Canadian investment abroad and nowhere near the $11 billion of Canadian money socked away in the Cayman Islands. At the same time, foreign investment in the Middle Kingdom has shot up by a phenomenal us$356 billion¹¹ between 2001 and 2006.

      The anemic performance even caught the attention of James Wolfensohn, the former president of the World Bank. During a speech at the Montreal Board of Trade Conference in 2004, he carefully admonished the country for not taking “as significant advantage of that extraordinary market as you might.” Howard Balloch, Canada’s former ambassador to China, is decidedly less diplomatic in his assessment of the country’s limp efforts. A trace of impatience ruffles his otherwise cool, bow-tied demeanour when asked why Canada still lingers at the water’s edge while the rest of the world takes the plunge.

      “The Japanese recognize their presence in China is vital to their own economic existence. They are huge investors. The Germans are all over China. General Motors is investing billions. Where are the auto parts companies? This is supposed to be our flagship industry. There is a housing boom and heavy demand for wooden flooring — where are Canadian forestry products? The Scandinavians are bringing in their wood and wood from Siberia and making furniture and shipping it to North America. Where are our furniture companies?” says Balloch. “Look where we are supposed to be strong in Canada. Why are we not there?”

       A MATTER OF PERSPECTIVE

      That question is at the very heart of this book. The next few chapters deal with the reasons why Canadians so often fail to make the leap from hometown success to global conquest. The answer is a complex one, the product of a unique confluence of history, geography and culture that has made a powerful impression on our collective imagination. At its most elemental level, it’s about perspective.

      Canadians seem to view the world through a fish-eye lens. Their immediate surroundings are dramatically overemphasized, to the point of distortion, while the backdrop — the outside world— appears dwarfed and distant. But just like the view from a fish-eye lens, the extreme wide angle is an optical illusion, fashioned through the careful engineering of optics and lenses to trick the mind’s eye. And we’ve been fooling ourselves in this way for a long time.

      The effect can perhaps best be observed in Vancouver. Nowhere in Canada does the country’s natural bounty loom so large. The city’s downtown boardrooms offer panoramic views of majestic mountains, lush forests and shimmering bays. The gaze of Vancouver, a coastal city with a natural harbour, is cast away from Canada, towards the Pacific Ocean and the Orient beyond. Yet the “Gateway to Asia” appears truncated, its wide, luxuriant pathway suddenly subsumed into a blurred, distant horizon.

      Despite the phalanx of glass and steel high-rises crowding the downtown skyline and a bustling port, Vancouver is essentially a “bedroom community,” says John Wiebe, head of the globe Foundation, an international consulting group, and the former president of the Asia Pacific Foundation of Canada. British Columbia, while leading the country in exports to Asia, remains among the least export-oriented provinces in Canada.* Why? Because the West Coast, like much of Canada, has never had to adjust its depth of field. As long as the foreground was in focus, the backdrop wasn’t all that important.

      Michael Novak, an executive vice-president with Quebec construction giant SNC –Lavalin, calls this phenomenon “the Canada syndrome.” Its origins and continued propagation can be traced to two key factors: an abundance of natural wealth that provided Canada’s tiny population with one of the highest ratios of natural resources per capita in the world; and the United States. Taken together, these two factors form the basis of a quick and easy trading recipe that some argue would spoil any cook from tackling more ambitious confections.

      Some 85 per cent of Canadian-made goods need travel no farther than a few hundred kilometres, into a market that is often no more difficult to