Canada needs to develop a comprehensive trade strategy with China if it wants to reap its vast economic benefits, says the head of Vancouver's port authority.

"I'm disappointed we don't have a cohesive trade strategy for China," Gordon Houston told a recent meeting at the Vancouver Board of Trade.

"China has become the world's fastest-growing consumer of natural resources, including forest products, mineral products and petroleum commodities produced in Western Canada and shipped through the Port of Vancouver.”

Houston, president and chief executive officer of the Vancouver Port Authority, urged Prime Minister Paul Martin to strengthen trade ties with the Communist country.

Port Authority CEO Gordon Houston urges stronger trade ties with China.

"That a nation like Canada does not have a cohesive strategy to optimize economic opportunities with the world's fastest-growing and most dynamic trading economy is just not acceptable.”

The growth of China-based business for Vancouver's port has already been phenomenal, he noted. "In fact, total volume of Canada's trade with China shipped through the Port of Vancouver has grown 56 per cent in the past year. Lumber exports are up 46 per cent. Sulphur exports are up 63 per cent.”

As well, Houston noted, there is a corresponding increase in the flow of Asian manufactured goods into North America.

The Port of Vancouver is projecting a 300-per-cent increase in container volumes over the next 15 years. But Houston said there are still major challenges looming on the horizon.

"We should be developing strategies and programs to tie our economic growth to our trade relations with China and other Asian nations," he said, otherwise, business will go elsewhere.

Moving faster is also critical, he added. "We're behind, and if we can't deliver the additional capacity quickly enough, they will go somewhere else. It's not just ports that require capital investment to handle current and future container trade with Asia. It's our road and rail infrastructure.”

Houston said congestion at the Port of Vancouver already is becoming a problem, noting that earlier this year container goods destined for markets in Eastern Canada and the American Mid-west were taking four to six days longer to arrive than they should.

The consequences of not dealing with this challenge are dire, he said.

"Not only do we risk losing out on tremendous economic opportunities associated with facilitating trade between North America and Asia, (but) we also run the risk of undermining the competitiveness of the Canadian industries we serve," Houston said.

And while he noted government agencies involved in the import and export business "do not seem to have a common vision of what needs to be done by their agency or themselves as individuals," Houston also praised the B.C. government for sending a representative on the authority's recent trade mission to Asia.

A 25-person trade delegation from the port and other industries recently visited its most important customers and business partners in Japan, South Korea, Taiwan, Hong Kong and China.

The B.C. government is developing a provincewide ports strategy that is expected to be released this week.

Houston said that potential business opportunities are so great that the Port of Vancouver could become the transportation hub for North America.

"Where we once served the transportation needs of domestic shippers and facilitated Canada's international trade with Asia-Pacific countries, we now have an opportunity to serve an entire continent.”

The current projected growth for the port is expected to create an additional 50,000 new jobs and contribute an extra $3 billion a year to Canada's gross domestic product by the year 2020.

"The people we met in Beijing, Shanghai, in Taipei, Seoul, Tokyo and Hong Kong told us they like our value proposition, our services, our costs, our geographic position as a gateway between Asia and North America. And they like our people," Houston said.

"In fact, one told us they'd double the container volumes they put through the Port of Vancouver tomorrow if they could . . . If we build it they will come.”

But, he added, it's an issue of capacity, and while the port's bulk and break bulk infrastructure is able to handle the expected volume, its lack of container capacity "is why we have a $1.4-billion program at the Port of Vancouver that will more than triple our container terminal capacity by 2020.”

Later in a question-and-answer session, Houston described the port's competitive position with Seattle as "fragile.”

And, he added, while he is not concerned about the amount of traffic that Seattle is generating by attracting the cruise ship business, he is concerned about additional container traffic going to Seattle.

He also urged Canadian National and Canadian Pacific railways to work closer together to handle the growth in capacity at the Port of Vancouver.

"The people of Asia are hell-bent on business. And I believe the growth we are seeing today will not slow down or flatten," he said.

"But the capacity has to be here in our ports, on our roads and in our rail systems. And it has to be here in time to facilitate the growth of Asia-Pacific trade.”

(George Froehlich can be reached at george@businessedge.ca)