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Crosscheck: Adding up the benefits of trade missions

"So we need to be there making sure they know we have these products, that we can help fuel their growth," Premier Christy Clark says, explaining why she is leading a trade mission to China and India.

Premier Christy Clark leaves for Guangzhou, China, on Friday for a 14-day trade mission. Representatives of more than 120 companies, educational institutions and business groups and 100 people from community organizations in B.C. will be on the mission for at least part of the trip. Ms. Clark has scheduled more than 100 meetings, announcements and signings of contracts, memoranda of understanding and letters of intent before she returns on Nov. 18 from Delhi.

However, her trip may not mean much for the B.C. economy. An academic study on whether trade missions increase trade, published last year in the Canadian Journal of Economics, concluded that trade missions have "small, negative and mainly insignificant effects."

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Researchers at UBC's Sauder School of Business – John Ries, HSBC professor in Asian business, and Keith Head, HSBC professor in Asian commerce – reviewed eight Team Canada trade missions to 17 different countries from 1994 to 2002. According to the Canadian government, the missions, often led by the prime minister, generated $33.2-billion in new business.

But several business deals would have happened regardless of whether the politicians made the trips, the researchers concluded. They did not find any reliable evidence that the missions generated tens of billions of dollars in new business deals.

"Trade is volatile," Prof. Head said Wednesday in an interview. The research had a benchmark to show what could be expected without the missions and the results of the trips. "There was no significant change in trade. It was just as likely to go up [after the mission]as to go down."

In searching for reasons why high-profile trips had no significant financial returns, the researchers found that the trips were to countries where Canadian businesses were already active. Announcements of new business deals were often agreements that would have been made regardless of the mission. The announcements were timed to coincide with the arrival of the politicians.

The College of the Rockies is one of 15 educational institutions participating in the mission. Similar to the findings in the academic study, the college had already planned to be in the area where the government trade mission was going.

Patricia Bowron, the school's executive director of international affairs, said the college often sends staff and faculty members to Asia to recruit and develop partnerships for faculty exchanges and overseas studies for students. Most recently, they were in Asia a week ago. Foreign students account for around 6 per cent of the enrolment of 2,633 at the Cranbrook-based college.

Ms. Bowron still saw value in joining with the trade mission. The government and education institutions will be working collaboratively to promote B.C. as a destination, she said. That message will help the college in its work, she said.

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Another example: Several B.C. mining companies will be in Beijing when Ms. Clark arrives. Ms. Clark's trip coincides with the sixth annual "investment attraction mission to China." The B.C. government organizes the mining-related mission to profile B.C. resources and help exploration companies find potential partners.

The mining-industry mission is in various cities in China from Nov. 2 to Nov. 15. But on Nov. 8, both the mining-industry mission and Ms. Clark are scheduled to be at the Canada Mineral Investment Forum.

Prof. Head said he did not set out to find that missions did not lead to an increase in trade. A conclusion that trade increased after a mission would have bolstered other research he was working on. "I was disappointed when it did not play out, and we could not find the results," Prof. Head said.

"But you have to let the data speak … Until we have some real evidence to show that they work, we better trust the statistics. That's why we look at data."

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