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Canada Needs Bigger Trade Deals, Says Economic GroupWednesday, June 27, 2012 > 09:35:47
(The Toronto Star)
The Harper government gets an A for effort on expanding trade globally but a much lower grade on actual successes, according to a new report by a high-powered economic group.
The project organized by Carleton University in Ottawa says Canadians have for too long relied on a “culture of comfort” in easy dependence on trade with the United States.
But exports to the U.S., which accounted for 87% of Canadian sales abroad in 2000, declined to 75% in 2010, the group says. “Depending almost exclusively on domestic and U.S. markets for future prosperity is not sustainable,” states the report, “Winning in a Changing World.” It was put together from national consultations by well-known business, academic and government figures, including project co-chairs Derek Burney, Thomas d’Aquino, Len Edwards and Fen Hampson.
Canada is involved in dozens of free-trade talks or pre-negotiation studies, as Prime Minister Stephen Harper often notes approvingly. But the Carleton study concludes Ottawa should prioritize its negotiations to take advantage of possible trade-liberalization rules with countries that are big enough to provide an economic jolt to Canada.
“The federal government must align the focus of its trade negotiations with market potential,” the report says. “It has not yet managed to conclude an agreement with a single high-growth Asian country.
“Recent agreements promise little commercial value,” the study adds. For example, a year’s worth of export value from a recently completed free-trade pact with Honduras “is equal to 71 minutes of Canada’s daily exports to the United States.”
“There’s been a tendency to go after low-hanging fruit,” Hampson, director of Carleton’s Norman Paterson School of International Affairs, told reporters.
The group, which met privately for an hour with Harper earlier Tuesday, said they urged him to beef up Canada’s spending on trade negotiating teams to maximize the country’s ability to hammer out worthwhile free-trade deals.
The group also said there is widespread demand among business and provincial governments for Ottawa to provide key leadership to pursue a more aggressive trade strategy.
“What is missing is a determined effort to leverage our strengths and to reshape Canadian policies and priorities to serve our national interest,” the report said.
In general, the group praised the trade policies of the Harper government, which last week announced Canada’s admission to the Trans-Pacific Partnership trade liberalization talks involving the U.S., New Zealand, Australia, Chile and other Pacific Rim countries.
Future prosperity in Canada clearly hinges on obtaining trade access to emerging countries, the report says. By 2050, it says, emerging markets will be home to 60% of the world’s wealth and 70% of world trade (with less than 8% of global commerce taking place in North America).
Among the group’s recommendations:
• More deliberate trade and investment strategies that harness Canada’s comparative economic and trade advantages with select emerging markets.
• A new, focused partnership among all levels of government and the private sector to expand trade beyond the U.S.
• Reaching international agreements that are tailored to the specific opportunities and risks of doing business in different emerging markets, where conventional trade and investment rules may be inadequate.
• A more predictable investment regime in Canada coupled with the development of Canadian businesses better able to compete in the global economy.