Canada’s trade-deal stalling shows it’s closed for business
Canadians have been waiting a long time for Justin Trudeau’s Liberal government to finally wake up to the many threats that loom large over our national economy.
Whether it’s market access for our natural resources, tax and regulatory competitiveness, or international trade diversification, Mr. Trudeau’s Liberals have failed to address Canada’s faltering position in the global economy.
However, it is on trade that Mr. Trudeau must act most urgently.
Last week, he replaced his international trade minister and told Canadians his government would renew its efforts to diversify our exports. He has opportunities to do so right now.
Top among them is the ratification of the Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP), the successor to the TPP agreement signed by our previous Conservative government.
The CPTPP was negotiated earlier this year and signed in March. The 11 signatory countries, including Canada, represent about 13 per cent of the global economy and an unprecedented opportunity to diversify our export markets. Three countries have already ratified CPTPP, with Singapore the latest on July 19.
That’s why I recently wrote to the prime minister urging him to immediately recall Parliament so we can pass this critical trade agreement.
Sadly, but not surprisingly, the Liberals swiftly rejected this request.
There’s no excuse to wait any longer.
The Peterson Institute for International Economics estimated that the TPP, in the version signed by the Conservative government, would boost Canadian income by $20 billion over the next decade.
This could have been an easy win for the government. Canada could have been the first country to ratify CPTPP, but the Trudeau Liberals delayed introducing the legislation until the very end of the Parliamentary session, guaranteeing this agreement would sit idle until the fall. It’s a terrible waste of time and one that has real consequences for our economy.
The fact is that one out of every five Canadian jobs depends on international trade and these essential trading relationships help to generate 60 per cent of our GDP.
This summer, we’re facing American tariffs on our steel and aluminum exports, and automotive tariffs are looming. Our own retaliatory tariffs are now being disputed by the U.S. at the World Trade Organization, a further attack on Canadian workers and businesses. The North American Free Trade Agreement itself is in serious jeopardy, with the U.S. indicating that it will not sign a new deal before November’s midterm elections. The outcome of these negotiations remains an open question that is very much in doubt.
While we can’t control America’s approach to trade, we can control our own. That means ratifying CPTPP right now, but also taking steps to forge new trade relationships and making Canada an attractive place to do business.
But on those two critical points, the Trudeau Liberals have failed.
Time and again they’ve demonstrated their lack of seriousness, not just to Canadians but to all our potential international trading partners as well. It was only last year that Trudeau touted a free-trade agreement with China, however his visit to Beijing in December set back our trading relationship.
This was compounded by gaffes and failures, such as the prime minister skipping a critical meeting on CPTPP, and his embarrassing trip to India.
But the Liberals have also weakened our position in these trade negotiations by pursuing failed policies to increase taxes and drive down growth. Higher costs, driven by policies such as the carbon tax and over-regulation, are making Canada less attractive as a place to invest. And as a result, foreign investors are taking a dim view of the Canadian market, with investment from abroad collapsing by 42 per cent in 2016 and a further 27 per cent in 2017.
It’s hard to persuade potential trading partners that our country is open for business when Liberal policies prove the opposite.
These trade challenges mean we have to take action to diversify our export markets now, and a speedy ratification of the CPTPP agreement represents a major step towards that goal. Further delays will cost us first-mover advantages in these markets, denying Canadian companies opportunities they are eager to grasp.
Jeff Nielsen, the president of the Grain Growers of Canada, said of CPTPP, “the longer approval is delayed, the more producers will be getting concerned about the impact on them. Other countries are moving faster than we are and we need to act without delay or we will lose a lot of access.”
Canadian Agri-Food Trade Council president Brian McInnes added, “with unprecedented uncertainty around NAFTA, there’s never been a better time to break down trade barriers so we can diversify and grow our agri-food exports.”
CPTPP’s ratification deadline is February 2019, which means there is still time for Canada to act. The Liberals must make CPTPP ratification a top legislative priority, or risk losing out on a monumental opportunity.
FURTHER DELAYS WILL COST US FIRST-MOVER ADVANTAGES.