International Trade BDO Dunwoody/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication June 14, 2004 COMPAS Inc. Public Opinion and Customer Research June 14, 2004
1.0 Introduction Canada s business leaders favour trade and not aid in helping poor countries succeed economically. While Canada s government organized trade missions are seen as being somewhat good, business leaders agree that governments should focus their efforts on removing barriers rather than encouraging trade, which would come naturally. With respect to foreign aid, respondents support continuing to give aid to poor countries however they are concerned that sometimes foreign aid improves the lifestyles of the politically connected elements of poor countries but does little to help the productive elements. These are the key findings of this week s web survey of Canadian business leaders, conducted under the sponsorship of the BDO Dunwoody and the Canadian Chamber of Commerce for publication in the Financial Post. 2.0 Trade, Not Aid, Does the Most Good for Poor Countries Nearly three quarters 1 of Canada business leaders agree that trade does a lot more or somewhat more good for poor countries, as shown in table 1. Half of respondents strongly favour trade, indicating trade does a lot more good. Among the one quarter of respondents who say aid does somewhat or a lot more good, 6% feel that way strongly indicating aid does a lot more good. Table 1: (Q2) On balance, would you say that [ROTATE POLES] Trade does a lot more good for poor countries Trade does somewhat more good for poor countries % 49 24 1 49% trade does a lot more good plus 24% trade does somewhat more good. 2
% Aid does somewhat more good for poor countries 19 Aid does a lot more good for poor countries 6 DNK 2 3.0 Support for Government Trade Missions; Removing Barriers to Trade is Most Effective for Encouraging Trade Respondents were asked to what extent government trade missions and money spent encouraging trade with poor countries does any good. Four fifths of respondents say that this investment in trade does some or a lot of good, as illustrated in table 2. Those respondents who say the trade missions do good outnumber those who trade the trade missions to little or no good 4:1. Table 2: (Q3) In general would you say that government trade missions and money spent encouraging trade with poor countries does % A lot of good 14 Some good 67 Very little good 16 No good at all 2 DNK 1 As some respondents noted: Government should stay out of trade unless they are relaxing trade barriers. 3
Poor countries will only develop if we increase access for their goods by lowering trade barriers and reducing subsidies The key factor is to find the balance between encouraging trade investments and removing trade barriers. Leaning too much to either side in the long run could hurt the economy. In the context of the criticism from the head of the World Bank Group that Canada does not do enough trade with China, respondents were asked to score their agreement with four opinions on trade. Business leaders strongly agree that governments should focus their efforts on removing barriers rather than encouraging trade, which would come naturally, assigning a mean score of 5.8 out of 7, as illustrated in table 3. Similarly, respondents oppose the opinion that it s vital that the federal government spend a lot more to encourage trade between Canada and China because government involvement is essential for trade to take place, assigning a mean score of 3.8 out of 7. One respondent noted, Governments need to take a more pro-active role in organizing trade missions and helping companies meet the economic needs of countries such as China where the growth potential is so strong. Table 3: (Q4) As you may know, the head of the World Bank criticized Canada for not trading enough with China. Using a 7 point scale where 7 means completely agree, and 1, the opposite, please score the following opinions: [ROTATE] In the trade arena, governments should focus their efforts on removing barriers rather than encouraging trade, which would come naturally MEAN 7 6 5 4 3 2 1 DNK 5.8 29 36 21 10 2 1 1 2 4
It s wasteful for governments to spend any more than they do encouraging trade because trade will take place when businesses and countries can each benefit from the exchange of goods and services It s harmful for governments to invest too much in encouraging trade because exchanges of goods that are useful and trustworthy trading partners are the key, not government trade programs It s vital that the federal government spend a lot more to encourage trade between Canada and China because government involvement is essential for trade to take place MEAN 7 6 5 4 3 2 1 DNK 4.8 14 24 22 16 13 6 3 2 4.8 13 24 25 14 9 6 4 4 3.8 6 9 18 25 18 15 8 2 4.0 Foreign Aid is Important; Moderate Concern that it Benefits the Political Elite in Poor Countries On the subject of foreign aid, business leaders support continuing to give foreign aid and on balance agree that foreign aid programs do far more good than bad. There is moderate concern that foreign aid improves the lifestyles of the politically connected elements of poor countries but does little to help the productive elements, with 64% of respondents agreeing with this statement. As one respondent noted, Aid to foreign countries does not help the people it is suppose to. It fills the pockets of the upper class. Some may trickle down, but not much. 5
(Q1) As you may know, there is debate about what countries like Canada could or could not do to help poor countries. Using a 7 point scale where 7 means completely agree, and 1, the opposite, please score the following opinions [ROTATE] Whatever frustrations we have, we must continue to give foreign aid Foreign aid improves the lifestyles of the politically connected elements of poor countries but does little to help the productive elements On balance, foreign aid programs do far more good than bad The record of squandered foreign aid shows that foreign aid does little to help these countries Foreign aid is vital for building goodwill towards Canada and the west The biggest risk of helping countries with aid instead of trade is that we unintentionally arouse anger and jealousy towards us MEAN 7 6 5 4 3 2 1 DNK 5.0 18 21 26 16 10 4 3 1 4.9 17 18 29 15 12 5 2 2 4.7 11 18 28 22 13 2 5 2 4.5 16 13 24 17 14 10 4 2 4.5 10 14 26 26 11 9 3 1 3.4 5 8 14 16 23 17 13 5 6
7
Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national Chambers of Commerce was conducted June 8-11, 2004. Respondents constitute an essentially hand-picked panel with a higher numerical representation of small and medium-sized firms. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of 174 are deemed accurate to within approximately 7.4 percentage points 19 times out of 20. The principal and co-investigator on this study are Conrad Winn, Ph.D and Tamara Gottlieb. 8