E-letter: Opening pitch

There is a lot to like as we enter the summer of 2017. Granted, my associates in the consumer press will find something negative to say, even if the day’s news is the Second Coming. But for us, all the indicators point up.

Kerry Knudsen

Saturday’s National Post buried one of the most positive stories on page 5 of the financial section. It must be painful to have to print it, at all. According to the Post, U.S. Secretary of the Treasury Steve Mnuchin has met with Finance Minister Bill Morneau five times in the last five months. The featured quote was that of Mnuchin reassuring Canada: “I think whatever we do, our objective is to make sure that this is positive for the U.S. economy, and positive for the Canadian economy to continue to allow the commerce that we have between us.”

This, of course, is the language of political hacks, and could as easily be said by Russia, Saudi Arabia, Venezuela, Australia or Great Britain. In fact, it’s hard to imagine two similar diplomats from anywhere saying anything else.

 

But let’s take a look at the nature of trading relationships. They can, of course, be predatory and aggressive, such as in war. Less extreme examples are in relationships that are still predatory, but parasitic, or in relationships that are symbiotic.

Parasitic relationships exist in between nations and between companies. For example, I recall in grad school being told by a predatory consumer advertiser that you can own a magazine or newspaper by simply tossing a few thousand dollars of graft to the editor in the form of trips or tennis shoes, or by threatening a publisher with pulling ads. I pointed out that the ultimate result of that philosophy would be the death of the publication, and he agreed, but responded that there will soon be another publication to come along and take the place of the dead one and things could then go on as if nothing had happened.

Of course, he was wrong. By the ʼ90s the market was awash with commercial efforts to communicate, the consumers got an alternative and they took it. Today, there are ghost and zombie titles in abundance for any marketer that wants to have a shot.

At the international level, you might see China or Turkey having a parasitic relationship with Canada. In symbiosis, benefit flows two ways. At the moment, it seems China benefits from exporting to Canada, but we see little importing from Canada in return. It almost seems the trade-off is that if we buy enough stuff they won’t get mad.

Which brings me back to Mnuchin. Five meetings in five months is a lot, if the U.S. administration’s only goal is to take and to sell. And it seems America may actually “get it,” that they can’t sell into Canada if Canada has no money from exports of its own. This is the heart of human trade since its inception. I make indigo dye; you make cotton. Country X weaves cloth and Country Y does sewing. Finishing, raw materials, processing and production. If we work together, we all get blue jeans. If we don’t, we have an abundance of indigo, which leaves us with the resources to paint our faces blue, and that’s about it.

 

I have been to Turkey a couple of times along life’s way. Once, I woke up at 4:45 a.m. with that sense something was wrong. And it was. There, in the pre-dawn light at the foot of the bed was a guy that had scaled the outside wall to reach our open, second-floor window. Fortunately for all, I encouraged him to go back out the same way he came in without the benefit of the wall. Lesson learned: don’t leave your window open.

In Turkey, you don’t buy things. You haggle. My rule of thumb there was to shoot for 30 percent of the asking price, and that usually worked. But to get to 30 percent, I usually started out at 15 percent, telling the seller that I respected his products, but that a friend of mine had overpaid and I wanted to start lower. I think the asking price is a gambit for suckers, and it appears most tourists follow their North American sensibilities and pay what the price tag says. As for the Turks, they seem happy to make the sale at the agreed price, and they enjoy the company of North Americans that know enough to learn their protocols.

Whether Trump is a politician or not, he is certainly a haggler. It can’t be otherwise. So, when he or his administration says they are going to rewrite NAFTA, kill the TPP or whatever, we have two ways to look at it. Either he is a political oaf issuing ultimatums, or he is a dealer making an offering price.

 

You can choose which one you see, but my money is on Canada and a long and healthy relationship with the States. They can’t be healthy if we aren’t healthy, despite the posturing and proffers.

Add that to the employment number, building permits, stock markets, investment in new housing and renovation and any number of other criteria you care to use, and it seems it’s time to make hay. The sun is shining, we’re eight days short of midsummer by the Stonehenge calendar, I have two pair of Levis, have never painted my face blue and I think this is a great time to be alive.

Skoal!

 

 

 

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