Canada needs trade deals
EDITORIAL: WHAT OTHERS THINK
It is fashionable, these days, to hate trade. It’s funny, in a way, since Canada has always been a trading nation. Even before we were actually a country, trade was the lifeblood of people living and making their living from the land and all its resources.
But the public will on trade, especially freer trade, has changed. Globalization, and its negative sideeffects, have given rise to a new wave of protectionism. It has provided fuel for the nowfloundering presidential campaign of Donald Trump. It was a key ingredient in the decision by United Kingdom citizens to leave the European Union. And here in Canada, it has led to growing dissatisfaction with the North American Free Trade Agreement and much public celebration of the news that CETA (the CanadaEurope Trade Agreement) is on the rocks thanks to opposition from a small region of Belgium called Wallonia.
Why? Because, in part, our governments — in Canada and around the world — haven’t done a good or entirely truthful job explaining and selling trade. There is a mountain of evidence supporting the mantra that countries and national economies benefit from more trade, from lower tariffs, increased exports and a greater choice of trade goods.
But because freer trade is good for the country overall doesn’t mean it’s good for everyone. Some individuals don’t get the benefits, they just get the pain. The auto sector is a good example. Back in what many would call the golden days of the industry in Ontario, the “auto pact” protected the sector and its workers from international competition. The auto industry flourished in Windsor, in St. Catharines, Oakville and Oshawa.
But it was a false economy because it failed to take the rest of the world into account. The car business was developing there, too. It wanted access to North American markets. The Big Three wanted access to those developing markets. Something had to give, and it did. Now we have an industry and marketplace open to a wider array of competition, with more competitive pricing and selection.
But the comfortable days of the protected marketplace are gone. North American automakers, squeezed by competing pressures, are looking to optimize profits and that means, in some cases, looking for cheaper jurisdictions where wages and other pressures aren’t as acute. Hello, Mexico. Hello, Kentucky and Korea.
Someone out there with real expertise on trade will probably say the auto sector isn’t a perfect example, and that’s true, but it works as a demonstration piece.
So, back to the golden era? Good luck with that. The world is trading more, not less. We can be part of that, or we can choose isolationism, which really isn’t an option. So we need CETA just like the Europeans need us. We have to make this deal or another like it work. Turning our backs on trade isn’t an option.
An editorial from the Hamilton Spectator (distributed by The Canadian Press)