The export sectors nobody predicted

When the free trade agreement was negotiated, the public argument was about agriculture and metals. The sectors that grew fastest under it were not the ones anybody was arguing about.

What grew

Furniture: components and finished pieces, supplying European retailers and manufacturers.

Wiring harnesses and cable assemblies for the automotive industry, made in plants near the western border, shipped daily to assembly lines a few hundred kilometres away.

Processed food: oils, confectionery, juice concentrate, frozen fruit and vegetables.

And a range of light manufacturing: clothing under contract, packaging, plastic and metal components.

What these have in common

They are labour-intensive relative to capital, which is where a wage differential produces a real advantage.

They are transport-sensitive: heavy or bulky relative to value, so proximity to the customer matters and a plant three hundred kilometres from the buyer beats one three thousand kilometres away.

They require certification but not enormous capital: a furniture factory or a harness plant is a manageable investment, unlike a steel mill.

And they sit inside somebody else's supply chain, which means the customer is a manufacturer with an interest in the supplier succeeding.

What this suggests

The realistic industrial opportunity here is not building national champions. It is being a reliable tier-two supplier to European manufacturing, at scale, close to the border.

That is a less exciting proposition and it is the one that has actually worked.

What the unpredicted export categories have in common is that each combines labour and distance: close to Europe, skilled and competitively priced. That same triangle pointed the same way in my own customer portfolio. The forecasts failed because those making them looked at the raw materials and not at the workshops.