1. Local and Global Trade
Leading Economic Change Number 4, May 2012
Why is global trade so important to
local economies?
If Nova Scotia were a big business, our accountants Thought leaders in community economic
would be worried. We sell over $7.4 billion in goods and development, such as the UK’s New Economy
services to the outside world. But this “revenue” is Foundation and Nova Scotia’s own Coady Institute,
offset by over $8.7 billion in “expenses” (imports). have a common analogy for the complexities of
local and global trade. The leaky bucket is a
And these numbers might be drastic underestimates of concept used around the world to help local
our province’s role in the global supply chain. communities understand and develop healthy
Conventional trade focuses on finished goods, forgeting trade patterns.
services and FDI. The Conference Board of Canada
estimates that, in 2007, our total integrative trade was Imagine your community is a bucket. Water is your
over $13.7 billion outward, and $33.9 billion inward. currency. New water flows into your bucket when
someone in the community sells goods or services
As you can imagine, the economists are really the ones outside your boundaries. Other in-flows include
who are worried. Nova Scotia is only able to manage government transfers and outside business
such a staggering trade deficit thanks to federal investment. These sources of income will help you
government transfers and spending. fill your bucket.
Our exports have doubled over the past quarter But buckets can have leaks: money is spent outside
century, but we are still less likely to be exporters than the community to buy imported goods or services,
businesses from other provinces. Unfortunately this and to invest in outside ventures (eg. retirement
reality is not widely understood at the local level. Trade savings). When more money is leaving the
statistics are “all greek” to local business and community than entering it, the bucket starts to
community leaders – those who can take action to empty.
resolve the problem.
NSARDA is the link between the Nova Scotia RDAs, providing support and collective strength.
Since 1999, the Association has helped the Nova Scotia RDAs in improving the economy of
communities across Nova Scotia. For more information about NSARDA and the Nova Scotia
RDAs please visit www.nsarda.ca.
Leading Economic Change: A Discussion Paper Series from NSARDA

2. How Can Community Economic
Developers Respond?
We often think of globalization as a dominant, looming There is no question that helping our businesses
pressure on communities. It can result in jobs and diversify their markets will contribute to economic
investment moving offshore toward lower-cost markets. development. The challenge is to help local businesses
In turn, globalization can also flood developed countries see beyond their immediate markets and become
with cheap material goods. export-ready. Wherever possible, we must look to
emerging markets like Brazil, Russia, India and China
The leaky bucket analogy helps us see two ways that (the BRIC countries).
local communities can develop their economies by
managing their trade patterns. First, they can focus on Community Economic Developers can also encourage
filling the bucket with new export revenues. Then, they import substitution. This approach to CED emerged in
can work to “plug the leaks” by replacing imports with international development over 60 years ago, and then
locally produced goods & services. found its way into North American regional
development circles in the 1970s. It involves connecting
The opportunities to develop new exports are local demand with local supply. A resurgence of import
tremendous. Nova Scotia’s principal exports are natural substitution in CED is currently underway, through Buy
gas (26% of exports by dollar value), fish & seafood Local campaigns, local currencies (“local exchange
(17%), tires (14%), and paper (10%). There is great trading systems”), and the food security movement.
potential to diversify these goods exports, and also to The latter received a boost when Dr.Vandana Shiva, an
expand a very promising service-export industry. international expert on sustainable agriculture, recently
visited Nova Scotia to speak about local, sustainable,
Meanwhile, North American firms are looking for near-
small-scale food production.
shore trade partners to replace less successful (and
politically unpopular) offshore out-sourcing. And Community Economic Developers have a clear role in
European firms are looking for North American helping their communities establish healthy local and
beachheads. Nova Scotia has historically played an global trade relationships.
intermediary role between the continents.
Transportation and logistics may be the field where we Ryan MacNeil, EcD, PhD(s), is Principal of Ryan MacNeil & Co., a
regain prominence in global supply chains. company that helps development leaders & organizations become
focused and effective. Reach him at ryan@ryanmacneil.com.
Who is working on it?
Nova Scotia’s Regional Development Authorities (RDAs) are all engaged in local and global trade issues,
particularly through the Business Retention & Expansion program. In one of many examples, the Pictou RDA
helped its local agriculture community create an asset-based development strategy and establish a brandmark so
that local residents are better able to identify locally grown food.
One of the three pillars in Nova Scotia’s jobsHere strategy is, “Helping businesses be more competitive globally.”
As part of JobsHere, a comprehensive new International Commerce Strategy is soon to be released. A variety of
departments are involved in trade development, with programming leadership coming from Nova Scotia Business
Inc. and Economic and Rural Development and Tourism.
Since its formation, the Atlantic Canada Opportunities Agency has made a priority of encouraging businesses to
export. ACOA is the lead federal agency in the Canada-Atlantic Provinces Agreement on International Business
Development 2011-2016, and offers a number of export support programs for business.
Leading Economic Change: A Discussion Paper Series from NSARDA