My colleague will speak about integrative trade in more detail, but I think this is a phenomenon that is only going to intensify as opposed to there being a period of time before we go back to a trading environment we are more familiar with, which we tend to think about in terms of Canada and how it exports to the rest of the world. I think we've now entered into a long-term and more intensifying phase where we are part of an integrated global trade network. Our success is going to be based on how well we integrate into that and identify the key supply chains that Canada has competence to offer, and then work to both get in those chains and expand within them.
That means we need to be looking at countries not as competitors, but to see what benefit they can ultimately bring to Canada. When you look at a market like China, on the surface it represents potentially a very competitive threat. At the same time, it represents a huge opportunity for Canadian companies to work at increasing and enhancing productivity, retaining here in Canada the expertise it takes to ultimately design the product and manage our participation in the supply chain, but at the same time benefiting from economies that can be derived from greater participation of emerging markets.
So we need to engage in that as an opportunity and less as a threat. I think we're making that transition in some markets and sectors; in others it's a more difficult transition. At the same time, we need to make the transition from a focus on manufacturing to one that gives greater recognition to the services and manufacturing in the larger sense, as opposed to manufacturing in the fabrication sense of the word. At EDC we've been experiencing that for some time.
What constitutes benefit for Canada? Many export credit agencies out there--EDC's competitors--still follow a concept of determining what content is coming out of their respective countries in order to qualify goods for their support. EDC works on the basis of the benefit Canada is deriving, which is a wider network. Then we take into account things like what R and D is going into that, since that's really a benefit that is being created, and it's a high-end benefit that Canada wants to maintain. For instance, Nortel Networks no longer manufactures in this country, but it's still eligible and still draws on EDC's support by virtue of the benefit it creates through its footprint here.
More and more I see EDC focusing on understanding the footprint of the business in Canada and how it can be enhanced through greater participation in the integrative trade model, and then doing whatever it can to help those companies get into various supply chains to be able to reap that benefit.