Mark Morris is a lawyer, legal expert, international business guy, and international man of mystery. In this episode, he joins us to talk about the challenges Canada is facing with trade with the United States, trade with allies around the world, and the challenges facing the Canadian economy.
00:10:05.760doesn't mean that other people are following and indeed other people aren't seemingly following
00:10:09.920and so the pain that is being experienced in america may end up being may it's still too
00:10:15.200early to tell may end up being a unique experiment in that country alone as the rest of us continue
00:10:19.520to prosper through free trade which ultimately benefits everyone that used to be a conservative
00:10:23.760precept by the way that used to be a conservative principle um you know mark you kind of raise a
00:10:29.200point as you talk about uh the the us putting itself in a sort of isolated position at the
00:10:35.360the moment that it was meant to be a power play. We're in a position right now, I guess, as the
00:10:42.120rest of the world to find allies. And we understand now at this very moment, it's come into clear
00:10:48.240focus that we are at war and it's an economic situation. Yes, there are bombs being dropped
00:10:57.520and missiles being sent. But really what's at the heart of this is economics. We've seen the
00:11:04.000economic fallout from this. We are predicting what the economics are ahead of this. And
00:11:10.800now having allies means having trade partners. It's almost like where that used to be separate
00:11:18.660almost of one another. We see now how integral it is that we have allies that are also our trade
00:11:26.660partners. You know, it's interesting because trade has driven civilizational advance since
00:11:32.920the 1200s. The country that trades the most with the world becomes the world power. Now,
00:11:39.200the definition of trade can be rapacious, stealing everything from India and bringing it back to
00:11:46.040Great Britain. But the point is goods moving back and forth, whichever country, the Dutch
00:11:51.380facilitated it through the East India, through the Dutch East India Company. The French facilitated
00:11:59.020it until Louis XVI. The British facilitated it throughout the 1800s. The Americans facilitated
00:12:05.880it for the... And now we're seeing the rise of China, which frankly facilitates trade better
00:12:10.120than anyone else. To remove yourself from the system that has proven itself since the 1200s
00:12:15.520to be the source of global power is folly. And the Americans seem intent on relearning that
00:12:23.660lesson. Let me give you an example of the obvious benefits that America
00:12:32.340held prior to engaging in its current course of action. Because I know we're going to talk about
00:12:39.880NATO. People love to, and the American, Trump particularly loves to say other people aren't
00:12:47.600paying their share when it comes to military and defense. And that is very true. Like, let's be0.98
00:12:55.700very clear. We have massively underinvested in defense. In this country particularly, it's
00:13:00.020embarrassing. Canada's military tradition, just give a shout out to the veterans, Canada's military
00:13:05.360tradition is one of incredibly proud service, but also aptitude. In World War II, we were known as
00:13:11.920the premier fighting force pretty much of the world, largely because our land was untouched
00:13:17.740and we were able to build up our capacities in ways that, you know, Europe couldn't.
00:13:21.260But still, and this is true, by the way, when we fought as the British in 1812 on forward,
00:13:27.500we've always had a proud fighting tradition.
00:13:29.720And our veterans in Afghanistan and in Iraq, they did us proud.
00:13:34.340Like, even though we were massively underfunding our military at that point, they did us proud.
00:13:38.940We have a military tradition that we as Canadians should be very proud of and, by the way, should rebuild because the military is actually very important for the past.
00:13:47.600And it's also, by the way, an amazing employment force.
00:13:50.680It's a great way to create national projects.
00:13:53.660It inspires us in many ways to do better around the world.
00:13:58.800My point is that there was a tradeoff that was made with the United States and all allied nations, which is, hey, America, you can provide your forces for everyone.
00:14:07.740And we in turn will use American military tech stacks. We will involve ourselves in the F-35.
00:14:14.560We will involve ourselves in the Patriot batteries. We will involve ourselves in what Trump wants to
00:14:19.660call the golden dome, whatever it is, doesn't matter. We will put our money into that so that
00:14:25.380we don't need to start from scratch and we can use your platforms. By Trump's singular comment
00:14:33.040that one day they may not be so friendly so we could turn off the F-35s, suddenly every single
00:14:38.560person realized that actually dependence upon the American military platforms are really problematic.
00:14:46.960And that's the reason that our spending has gone up from 0.8% of GDP to over two. It's because not
00:14:54.760only are we massively investing in actual guns, bombs, and everything else and training, but we
00:15:01.760are now also creating the raw infrastructure that America basically provided as a sunk cost.
00:15:07.920And we have to build that up ourselves now. And so do every allied nation. So does France. So does
00:15:13.040Britain. So does Germany. We're all realizing that we need to spend money. But that money comes at a
00:15:18.840direct cost to the United States, because we were subsidizing their military. Every person was
00:15:24.840subsidizing their military, because the military in turn was subsidizing trade routes, global peace
00:15:30.100and everything else. When Trump announced he's no longer going to do that job, when Trump said,
00:15:34.240you're on your own, fellas, what he did was he gave everyone the incentive to ultimately say,
00:15:38.960well, that's fine. But if you're not going to provide the raw sunk costs, we now need to spend
00:15:42.940on our sunk costs. And that explains Carney's recent decision that, hey, 70% of our military
00:15:49.140spend was going to the United States, no more. Why? Because now if America's not going to protect us,
00:15:53.920well, let's build our own economies. Let's build our own resources. We've done it before.
00:15:57.620We are very good at it. We're a military nation when we want to be, and we will be again.
00:16:02.680And that's being forced on us. But at the same time, it's something that provides unique opportunity at this time of day.
00:16:09.720It's interesting that we are sitting here talking about the increase in defense spending, which came out in Carney's budget.
00:16:17.800By the way, he's suspended that budget and we're expecting a new one.
00:16:21.360But I wonder if that new budget will have an even larger increase in defense spending.
00:16:29.140And it makes me think to myself, OK, we're going to participate in NATO properly.
00:18:08.360High oil prices, because Canada primarily exports raw materials
00:18:12.200and oil is a major component, directly affects our dollar.
00:18:15.560You'll remember the last time we were at par, the oil price was spiking.
00:18:20.740Our dollar is set for a pretty good run,
00:18:23.780and vis-a-vis other global currencies were really high.
00:18:26.700Vis-a-vis the United States, the United States still being the reserve currency,
00:18:30.160is partaking in the benefit of massive global instability.
00:18:33.400um and as a result huge dollars are flowing in right now i have a feeling that i think though
00:18:39.080that our dollar is being propped up right now by the increase in oil uh per barrel it is out of
00:18:45.400alberta and i wonder if okay so you know the u.s has all of these options likely on oil moving
00:18:53.740forward they're looking at venezuela they're uh you know bullying their way around the world trying
00:18:58.920take whatever oil or make whatever oil deals they can they're the biggest buyer of our raw product
00:19:05.400i just wonder if what we're looking at by the way over the last couple of days is an increase in the
00:19:09.960dollar but we were decidedly headed that way and if the effects of this war haven't really taken
00:19:16.920effect yet we might find ourselves there in as little as 30 days so so first off because we're
00:19:23.720only talking about the dollar now you asked a whole bunch of other questions i don't know why
00:19:26.040we got on that sorry about that no problem but first off the dollar is directly reflective of
00:19:31.720the oil price because we're a petrodollar that's that's what we are like i'd love to say that we're
00:19:36.440an economy of brains and brawn and manufacturing prowess and everything else but we're actually 37
00:19:42.360million people in an 8 billion person world and all we have is land and resources and so the
00:19:48.040petrodollar directly affects us but it is expected that the petrodollar now will have or the
00:19:56.040oil price will be spiked for a very long time and when i say a very long time i'm talking about
00:20:01.400several years not several months which means that given the reality of our goal
00:20:06.520yeah given the reality of our dollar we are simply put going to see a higher canadian dollar as a
00:20:13.160result because again the way it works is that in order to buy canadian oil you have to buy
00:20:19.880canadian dollars because we then will sell it to you and so that's what props up the dollar fine
00:20:26.120as regards to the fact that the united states has other sources who cares oil is a global price
00:20:33.480it doesn't matter if the market goes up our price is based on texas sweet crude right
00:20:39.240it's based on texas street sweet crude sure but texas sweet crude is in turn based on the global
00:20:44.680oil price which is impacted by the i got you okay right and as a result it doesn't really
00:20:49.160matter where the United States is getting their product from. China wants our product. So if we
00:20:54.580have to put it on a tanker and get it out there, great. People are still ready to pay the dollar
00:20:58.600value. Moreover, India is now desperate for our product because China is a bit different than0.53
00:21:04.160India. China has over the past five, six years actually reduced. I'm not talking about reduced
00:21:10.440its growth in fossil fuels. Last year, it reduced its total fossil fuel consumption.
00:21:18.900And it was the second year it did that in a row. Look up the stats. It's very interesting.
00:21:23.520And the reason that they did that is because, don't get me wrong, they still are producing
00:21:27.580coal and they're still doing all their stuff, nuclear, but they are massively producing
00:21:33.520renewables. And they're not doing it because they're good people, by the way. I want to be
00:21:37.700very clear about this. They're not sitting there singing kumbaya, holding hands and saying we care
00:21:42.460about the environment. I'd love if that was the case. Environment is my thing. That's not what's
00:21:46.440going on. What's going on is that they don't have domestic sources of fossil fuels outside of coal.
00:21:52.240And as a result, they see it as a source of strategic disadvantage and massive vulnerability.
00:21:57.260The reason that they've invested in solar the way that they've invested, and the reason that0.98
00:22:01.000America doesn't give a shit about solar is because America sees its future in fossil fuels because0.96
00:22:06.660it has a lot of them. China, which has none of them, and by the way, has no water either,0.98
00:22:11.520sees a much bigger problem. And it realizes that renewables are the only way forward through
00:22:16.080its security advantages. And it made that deal about 2011, 2012, when it massively invested in
00:22:23.120solar. The efficacy of full solar rose to 35% efficacy, which means every single electron of
00:22:29.660sun that comes from the sun, 35% of it is converted into electricity at the present time.
00:22:34.300and they've now been able to generate huge huge huge quantities to the point where they're no
00:22:39.540longer as dependent upon oil as they once it's incredible you see the you see the fields that
00:22:44.820they've built i mean it's miles by miles isn't it i pointed out to you the tibetan field last
00:22:50.380spoke and i told you there's a 500 square kilometer tibetan field for solar that is
00:22:55.680generating one i think it was one terawatt of energy which is by the way the united states
00:23:00.620consumes 1.2 terawatts in total on a given year and they're generating one terawatt i mean check my
00:23:08.380numbers because i'm not an energy expert but i remember reading these numbers they're just
00:23:11.820astounding whatever they are it doesn't matter so mark but to this end i mean my point is this my
00:23:17.180point is china's not dependent but india hasn't made that transition yet and neither has uh brazil
00:23:23.580and neither has a whole bunch of other countries and all of them are massively dependent and all
00:23:28.300of them need our product. So on that note, do they then become allies of ours? And the reason that I
00:23:35.180ask this is because we're seeing what dependence on oil means around the world and how it impacts
00:23:41.420humanity. Do we start to sell to the Chinese market? Does that upset the US when we're
00:23:49.020diverting and doing business with China when they would prefer that we don't? I mean,0.75
00:23:54.060Trump has made it really clear that we shouldn't be doing as much business with China as we're
00:23:57.980doing and i just wonder if our economic ties to other countries now will strain our relationship
00:24:05.180with the us sure meaning we've got new allies and we're upsetting our largest ally sure well
00:24:13.740first off it's worth calling the kettle black i mean the united states on a gdp basis does far
00:24:20.140more trade with care with china than canada does far more okay yeah way way way way more on a per
00:24:26.940person basis they do way way more so for them to sit there and say you can't work with china
00:24:32.140is just the the height of hypocrisy and can be pointed out in real time to them at all times0.60
00:24:38.620but it's shocking that they won't hear that but well i mean it's true they don't want to hear
00:24:43.740what they don't want to hear but it doesn't change the reality um the really interesting
00:24:50.700part here is your question okay well what formulates the basis for new friendships
00:24:57.980and i'm going to go back to the 1200s what formulates the basis for um new friendships
00:25:04.780actually it's not the 1200s it was um uh it wasn't until free trade came about
00:25:11.900that trade itself became mutually beneficial it wasn't beneficial for the indian subcontinent
00:25:18.300that that that that multiple hours of china or for any of the conquered territories that people came
00:25:27.180in scrubbed their land clean of treasure and and and uh and and riches and took it back to their
00:25:33.980country that was trade that wasn't beneficial trade right since free trade i think that was
00:25:40.140called plundering but that was called plundering since the advent of free trade that benefits both
00:25:46.220sides and i mean there's classic economics that bears this out and it's the whole thing that
00:25:50.060trump doesn't want to understand but the idea is that it's not a zero-sum game trump trade is
00:25:54.620something that can ultimately expand the pie meaning that both parties benefit a conservative
00:25:59.020a traditional conservative audience understands this very well this is the whole basis of
00:26:03.340our global economy and to that end if you're asking where the new ally ships will lead all
00:26:07.980All you need to really look at is where the growing trade routes are, because where the growing trade routes are, there is more of a pie that both of us are eating from.
00:26:15.300And the more we both eat together, the more you sit together with someone and have dinner, the more friends you make.
00:26:29.460So if you're wondering where our new traditional growing allies are going to be, I mean, no one in Canada is stupid enough to say the United States isn't going to be a massive.0.89
00:26:37.980massive part of our life forevermore. They will. In the same way, by the way, that someone who has0.89
00:26:43.980three kids with someone and is getting a divorce cannot possibly say, this person is not going to
00:26:49.520be part of my life. They're obviously going to be part of your life. That's it. You have to learn to
00:26:53.440live with it. You have to learn to deal with it. And to the extent that, by the way, that we're
00:26:56.540having perhaps a fight, we probably won't even end up divorced. We'll probably end up remembering
00:27:02.440that this was a poor time in our relationship and we'll recover with better leadership and
00:27:06.700everything else. All of that's true. But in the interim, we're eating pie with other people and
00:27:12.320we're developing new relationships. Some of those people that we're eating with and going on dates
00:27:16.480with are pretty sexy. Yes. Tell me the sexy list of our current dates in your mind.0.99
00:27:24.220Well, let's, I mean, let's just take the growing powers of this world. So there's a couple of
00:27:29.940growing powers. There's India, very clearly a growing power. Brazil, very clearly a growing
00:27:36.740power. China, very clearly a growing power. Those are the three. Oh, and then I would have I would
00:27:45.460add long term, obviously, they're going through a bit of a rut. But the Middle Eastern countries
00:27:50.280of saudi arabia um and uh the uae and others are also equally powerful uh economic forces
00:28:01.880those are trade allies do you see any sort of defensive allies out there that we are
00:28:08.520gravitating toward that we might not have before yeah um oh and by the way mexico is also a growing
00:28:14.840power and that that's very important because we have deep and abiding um disputes and also trade
00:28:24.840uh with with mexico so let's keep that in mind although it's not growing the same way china is
00:28:29.400and india is but it's still growing significantly um so sorry mike your question was oh yeah uh
00:28:36.280these are good trade partners that we're developing but are you starting to see any
00:28:40.280sort of defensive positioning that we might find in countries where we weren't hanging out before
00:28:45.560or uh teaming up with or aligning with well there's a very simple reason that we're aligning
00:28:51.640with the people we are which happens to be north uh in north europe um there's there's actually
00:28:57.960two major reasons one the arctic's about to open up and we need to have arctic security it's the
00:29:03.800same reason that trump was trying to go for greenland uh the arctic is everything russia
00:29:08.840knows it and they're now a dissipated force because of what has happened in the ukraine
00:29:13.000um but so do the arctic states finland norway sweden iceland us um and so there's a natural
00:29:20.440affinity of interest that we have given that we see the next 30 to 40 years worth of conflict
00:29:27.320resolving or really being over establishing that new territory because really it is new territory
00:29:33.480new routes, new transport, new trade. It's critical. Also, we have an affinity of cultural
00:29:40.400interest with most of the European countries. After all, we come from there. We have the same
00:29:45.000culture. We have the same beliefs. We have the same technologies, systems, understandings,
00:29:52.440languages. So obviously, our natural tendency, if the Americans are out, is to bolster our European
00:30:00.300allies who seem all too well willing to do a bolstering. But more importantly, and this is
00:30:06.460not really known by many people, particularly those people who have only paid attention to
00:30:10.800military materials tangentially. One of the premier powers in this world, military powers in this
00:30:19.700world is Ukraine. And people don't really appreciate it. But Iran's war is bringing it0.68
00:30:27.400into sharp relief and focus. Look, Ukraine has 1 10th of the population of Russia. And they are
00:30:35.380now in a position where they are not losing a single piece of territory. Moreover, they're
00:30:40.600bombing the hell out of Russia and Russia can't do anything back. That was the easy one. The fact0.79
00:30:47.100is the Americans sent over two aircraft carriers to Iran. Only one is there because it had a
00:30:54.300washroom malfunction, but actually it was later revealed that Iran pummeled it with it had a fire
00:30:59.420on board. Yeah. And now it's out of commission for two years. Yeah. That's the power of Ukraine's
00:31:05.600technology. It's not an advanced weaponry in the form of multimillion dollar drones. It's in the
00:31:12.420it's in the massive scale up of cheap technology brought to bear. And Iran actually was really0.99
00:31:22.500its counterparty, but it was beating Iran because Iran was supplying Russia. We were all supplying0.68
00:31:27.140Ukraine. Ukraine has now built up this defense capability, and that defense capability is wanted
00:31:32.300by the whole world. The Americans are extremely angry at Saudi Arabia at the present time because
00:31:36.660Saudi Arabia just did a defense deal with Ukraine. America, Trump hates Ukraine. Trump's trying to
00:31:42.000do business in Russia, and so he's trying to undermine it and destroy Ukraine as a country.
00:31:46.700They were furious when they suddenly realized that Ukraine, not the United States, was being
00:31:51.660asked for so i'm able to solicit saudi money because saudi arabia looked at their defensive
00:31:57.500network and said this is more valuable to us in today's economy i don't need a patriot
00:32:01.100bed missile battery even though it's better that costs two million i need a drone that costs
00:32:06.620three thousand and i know that's that's an interesting point because now you're not
00:32:11.660fighting missiles with multi-million you're not fighting wars with multi-million dollar missiles
00:32:15.900you're fighting them with drones and and i don't know if you know this uh mark i've never told you
00:32:19.980this but i have a warehouse uh do you know how many drones i can fit in my warehouse 2000 and i
00:32:26.700have six warehouses okay exactly and you know i i had a meeting so i i ran a podcast for for a bit
00:32:35.020and uh i do do writing a podcast and one of the guests on that i had was general ben hodges
00:32:40.060uh who was commander of the uh eastern european um uh sorry the european uh the american command
00:32:47.100in Europe. And we had a big discussion about asymmetric warfare, because that's what this is.
00:32:52.160And asymmetric warfare is the idea that America, you can invest trillions of dollars, but trillions
00:32:58.240of dollars is something that becomes a vulnerability when you invest that much, if you can take it out
00:33:04.080with 5,000. And so if you're asking where our natural military allyship is, both because of
00:33:10.280culture and because of the geography of situation, but above all else, because they are now the
00:33:17.080premier exporter of the defense that the world needs. It's Europe. It's clearly Europe. China
00:33:22.920is learning from Europe. India is learning from Europe. People are not trying to buy...0.79
00:33:29.320Russian technology is totally discredited. It's always been a joke, but it's been proven to be
00:33:35.400joke. No one buys commercial. American technology is now discredited because of political leadership,
00:33:41.480where Trump has basically said we can cut you off at any time. Well, because these tech stacks cost
00:33:46.040billions of dollars, you don't invest in something where someone is erratic and ultimately can cut
00:33:50.280you off at the push of a button. So who do you invest in? Well, you invest in someone who is
00:33:54.760proving that they have a technology that is cheap, easily deployed, and that fundamentally can't be
00:34:01.480controlled through centralized means and that that that that avails itself incredibly well
00:34:06.840to artificial intelligence swarms of drones can be controlled through artificial intelligence
00:34:13.400and this is the new reality that we face so if you're asking where our defensive posture is
00:34:17.960i think anyone both in the military for the economy and for our culture everyone looks to
00:34:23.400europe first and foremost then secondary is yeah i was going to say and and beyond that
00:34:29.880it seems like we're developing relations in japan south korea china right well the reason
00:34:37.640that those guys are militarily important is because they see benefit in the status quo so
00:34:42.600it's not that they have the same culture or understanding or desires but what they do have
00:34:47.720a desire to keep doing is it's been global trade has been very good to china it joined the wto in
00:34:53.7202001. Look at what it is now. It wants to keep this system going. And more importantly, it will
00:34:59.940use force to protect it. There's a reason it hasn't attacked Taiwan recently. May still. I don't think
00:35:07.400it will. I think it's just, personally, I think Taiwan's, even though Trump is there, and Trump
00:35:13.580won't raise a finger to help Taiwan, China has not chosen to attack Taiwan. And I think the reason
00:35:20.160that is because it just keeps growing stronger stronger and stronger and stronger and perhaps
00:35:25.040the best way to take over taiwan tsmc and everything else is just to build out your
00:35:30.480economy such that you're better and then at that point taking them over becomes a non-issue the
00:35:35.040reason we're all freaking out is because they produce the nvidia chips and they produce all
00:35:38.240the other chips that exactly china's china's massively investing in lithography they're0.88
00:35:43.120expecting to get ahead of the game um you know like they have the power to produce for the chips
00:35:48.880all of these anyways the point is you just raised a good point we spend our existence
00:35:54.960intimidated by the us will they do trade with us will they protect us will they take us over
00:36:00.560that wouldn't be in question if we just got better right right exactly and look to some
00:36:07.360degree canada can't become you know let's be honest like like we're 37 million there are 400
00:36:14.480million like at some point there is a structural limitation to becoming a global power the way the
00:36:23.360united states is but it doesn't take away from your point which is canada can be way better than
00:36:27.040it is canada can yeah i mean it can put ourselves in a position where the status quo is that they
00:36:33.360find us mutually beneficial right that we're not viewed as a drain on their economy that we're
00:36:38.400productive and supplying things to the world that are desirable to them right well i mean strangely
00:36:45.120the americans that are actually in business and not in graft understand that we are all those
00:36:50.640things i mean canada is massively those things for the united states we are a huge benefit to
00:36:55.040the united states to the point where we are impeding our own growth because we just give
00:36:59.200our raw materials to them and then we become a consumer economy where we buy out their finished
00:37:04.320products i mean we're we can do better we can do better you know what mark i want you to be part
00:37:09.760of my new team i'm gonna start a company called petro canada and we're gonna make petroleum for
00:37:15.600our own nation what do you think i think it's a great idea and then i think we should ultimately
00:37:20.880sell it to uh private interests at some point in the turn of a government and then we can all
00:37:26.080lament we've lost oh you know what let's learn from our lessons previously mark morris thanks
00:37:32.160sir uh i really appreciate you doing this on short notice you're the guy that we turn to and i hope
00:37:36.800that you'll be around more as we dissect what's going on around the world uh because you're out
00:37:41.520there uh your next trip is madagascar you are in asia you're the guy that we know that has more air
00:37:48.000miles uh than anybody else on our team so thank you i appreciate for being here i want to be clear
00:37:52.960that's not for business that's because king julian's theme song from madagascar thing i have0.94
00:37:57.840young kids played in my ear forever i'm gonna go find that lemur i'm gonna go kick him in the rear0.64
00:38:03.040and i'm gonna take my vengeance that's the reason that's the reason for madagascar0.89
00:38:07.840i understand i got lion king on my list all right thank you my man my best take care mike
00:38:20.080patriotic means looking up for each other and fixing things together true patriotism is being
00:38:27.120in a country you love surrounded by people you love and great weather being a patriot is being
00:38:31.840a part of your community and caring for it it doesn't matter who you are or where you're from
00:38:36.320patriotism is the one thing we all share it's okay to be critical of government and still be
00:38:42.400a patriot it's gratitude to your country of course i'm a patriot i'm canadian it's my home
00:38:48.080Well, actually, true patriot love is the mission.