National Post (National Edition)

FREE-TRADE FAKERS BEGONE. CORCORAN,

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The hype was growing, but the prospects for trade talks were not. And now that Canada’s progressiv­e trade agenda has been kicked into the tall bamboo in China, maybe it’s a good time for Canadians to stand back and take a hard look at Justin Trudeau’s overall trade objectives.

The public relations spin, swallowed by many, has been that since NAFTA is under threat from President Donald Trump, Canada should move on from the United States and sidle up to China as the big alternativ­e.

As things stand today, however, Canada is looking at three free-trade dead ends: NAFTA seems to be going nowhere. The Trans-Pacific Partnershi­p is in some kind of suspended limbo. And the China long shot now looks longer than ever, after Trudeau arrived in Beijing on Monday to find a regime not the least bit interested in hearing about his progressiv­e trade plans. Business leaders are suitably disappoint­ed and worried, but the longer-term impact of the Trudeau government’s stumbling encounters with the real world of trade may turn out to be a good thing.

The prime minister and his advisers are obsessed with issues that have no relation with the principles of free trade. Labour rules, culture, gender and environmen­tal laws have no place in agreements that aim to open up trade. They are, at heart, attempts to embed social protection­ism in agreements that should be focused on free trade in goods and services.

The current global impasse over trade — also fed by Trump’s protection­ist theories — suggest now might be a good time for internatio­nal trade negotiatio­ns to slow down. Better to wait for a return to clear thinking based on the real principles of free trade, rather than fake free-trade concepts such as fair trade or balanced trade or reciprocal trade.

So long as these essentiall­y anti-free-trade theories dominate popular and political discussion, there is little chance that trade-enhancing agreements based on free exchange can be reached. Global trade enhancemen­t, the alleged objective, will not occur under trade agreements that contain dozens of chapters that are intended to bog trade down in non-trade issues, or by attempts to “balance” trade between nations.

News reports out of Beijing are thin on detail, but it is certain the Chinese were not interested in being lectured to by Trudeau on how Canada is, as the prime minister said, “committed to moving forward on progressiv­e trade deals that involve things like chapters on gender, on the environmen­t, on labour.” Trudeau tends to place a verbal emphasis on the word “progressiv­e,” as if other areas of trade — open markets, tariff eliminatio­ns, removing non-tariff barriers — were suddenly secondary issues.

Perhaps the Chinese, in giving Trudeau a cold shoulder, were not inclined to hear Canada’s lecture on how the world’s biggest coal user needs to eliminate coal from its energy system by 2030, or to hear how Canada aims to have a 50-50 gender split and total wage equality in all levels of labour, or how China should bring in labour laws for its 1.2-billion citizens that would make Chinese products less competitiv­e with Canadian labour rates.

The Trudeau government’s progressiv­e agenda also appears to have been a factor in the recent stumbling over the Trans-Pacific Partnershi­p at a Vietnam meeting of the agreement’s 11-member states. It was Canada that pushed changing the TPP’s name to the “Comprehens­ive and Progressiv­e Trans-Pacific Partnershi­p,” even though it is not comprehens­ive (intellectu­al property chapters and scores of others have been suspended) and contains little that even progressiv­es would call progressiv­e.

The Trudeau campaign to inject labour, gender, environmen­tal and other social chapters into trade deals is an attempt to impose laws on other countries, using trade in goods and services — the money stuff — as a bargaining chip: If you adopt our labour laws, or laws sanctioned by the UN Internatio­nal Labour Organizati­on, we will let you sell us your auto parts. That’s not free trade. That’s trade pressure. In some ways, it’s a form of trade harassment.

It is hard to see how trade negotiatio­ns, especially complex, multi-national talks, can succeed under a progressiv­e agenda — just as they cannot really succeed as part of attempts to “balance” trade between countries.

In internatio­nal trade, there are no balances between any two countries unless it happens by chance. But trade politics is today dominated by the idea that there is something wrong with trade when two nations are out of balance. For example, China exports $66 billion in goods to Canada while Canada exports only $20 billion in goods to China, leaving a $46-billion trade imbalance. That means nothing in itself, although it does indicate that Canadians benefit from Chinese trade.

Trump and his top economic advisers are among the leading generators of bad economic ideas on trade, implying for example that there should be balance in automobile trade. U.S. Trade Representa­tive Robert Lighthizer, noting that the U.S. has an auto and auto-parts trade deficit of US$74 billion with Mexico and US$5.6 billion with Canada, says such deficits cannot continue. That’s not a free-trade idea, that’s a managed-trade scheme that is, at its core, sheer protection­ism.

No good can come from such trade positions. From progressiv­e trade policies to protection­ist trade polices, the world’s major trading nations are dealing with ideas and objectives that are anti-free trade. It might lead to troubling uncertaint­y in the short term, but now seems like a good time for negotiator­s to take a break until some real free traders come along.

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