Free trade becomes a Canadian priority

Not since NAFTA was negotiated 20 years ago has a Canadian government been on such a free-trade frenzy - one that proponents say will be an economic gold mine, but one that critics fear will cost the country jobs and sovereignty.

The Trans-Pacific Partnership, Canada-European Union trade agreement, bilateral negotiations with India, South Korea and dozens of other countries - they're all part of the Conservative government's free-trade push on what, until recently, had been a sleeper file.

A new Beyond the Border trade and perimeter security agreement between Canada and the United States - meant to thin what has been a thickening border - is another move in that direction.

"I don't ever recall a time, except maybe during the freetrade debate (of the late 1980s), when the government has put so much stock in trade negotiations at the centre of its economic policy," explained John Weekes, Canada's chief negotiator for the North American Free Trade Agreement, and now a senior adviser at Bennett Jones law firm in Ottawa.

Indeed, the Conservative government's attempt to sow stronger global economic ties is arguably the most ambitious trade agenda in a generation in this country. However, many of the pacts are sparking concerns, to varying degrees, about what Canadians will sacrifice in return. The trade deals could have profound effects on domestic jobs, personal privacy, the prices of consumer products, the quality of foods we eat and the health care of Canadians.

The costs of pharmaceutical drugs, dairy and poultry products, vehicles and municipal infrastructure projects could all be directly affected by new trade agreements. In the same vein, experts say additional trade could generate more jobs in some sectors and eliminate positions in others.

"Our government has put a special focus on expanding Canada's trade relationships. We clearly feel that free and open trade is one of the best job creators and is critical to Canada's long-term prosperity," said International Trade Minister Ed Fast.

Since the Tories came to power in 2006, Canada has signed free-trade agreements with nine countries and continues to negotiate with about 50 others, although many of them are smaller deals and seen by some trade specialists as providing minimal benefit.

Observers note the federal government still has no free-trade agreements with Asian countries - even though the Tories are trumpeting an Asia-Pacific agenda - and has developed a reputation for starting talks, but being unable to seal the deal.

"We will not sign trade agreements unless they're in the best interests of Canada - that drives all considerations," Fast said.

Canada, for example, has been negotiating with Singapore for a decade and South Korea for seven years, but the trade minister said it's simply the federal government doing its due diligence.

Topping the list of negotiations currently on the go include the Canada-EU free-trade deal as well as the Trans-Pacific Partnership group of nine Asia-Pacific nations (including the U.S.), which Japan and Mexico are also looking to join.

Canada and the European Union are nearing completion of the Comprehensive Economic and Trade Agreement (CETA) that would give Canadian companies preferential access to an EU market of 500 million consumers in 27 member states. A deal is expected to be finalized in 2012. Federal officials say the agreement will either immediately eliminate all trade tariffs or phase them out over time, ultimately lowering the prices of goods and services for consumers, while also creating new and better jobs for Canadians.

The government maintains a Canada-EU agreement would boost the Canadian economy by $12 billion annually, create tens of thousands of new jobs by growing export markets, and increase two-way trade by 20 per cent, or $38 billion a year.

Opposition parties, however, question the government's claims of an economic windfall for Canada.
"They are not based upon any real science. We haven't seen any real examination of that," said NDP international trade critic Brian Masse.

Weekes, the chief NAFTA negotiator, said he sees the Canada-EU agreement as "a really big test" for the Conservative government's broader trade agenda. "There's going to be some political cost to doing this with some of the things that will probably have to be done if we're going to have a good quality agreement with the EU," Weekes said.

Peter Clark, a former Canadian trade negotiator who's now president of an Ottawa-based trade consultancy, believes Canada will pay a hefty price if it signs the agreement because the Tory government wants it more than the EU.

"The European deal is such a big one that they (EU) have got the leverage," Clark said.

The European Union represents Canada's second-largest trading partner, next to the United States. Canadian exports to the EU totalled $49.2 billion in 2010, with imports of $55.3 billion.

But it's arguably an Asia-Pacific pact, not the EU deal, that is drawing the most attention from the government and Canadian businesses.

The Conservative government has asked to formally join the emerging Trans-Pacific Partnership trade group of nine Asia-Pacific countries, including the United States, and Prime Minister Stephen Harper has said Canada's controversial supply management system is on the table.

A handful of countries in the TPP negotiations - including New Zealand and the U.S. - had initially been resisting Canada's entry into the group because of the Canadian supply management system that protects fewer than 20,000 dairy and poultry farmers behind a tariff wall and hands them production quotas.

For months, the Conservative government repeatedly said it would strongly defend Canada's supply management system and that it wasn't in the country's interest to join the TPP. But the tone recently changed, with Harper announcing at the Asia-Pacific Economic Cooperation summit in November that his government now wants into the TPP.

Harper said at the time that Canada can "easily meet" the broad strokes of the agreement, even if it means throwing supply management into the mix.

"We are prepared to discuss all issues at the bargaining table," said Fast. "But we've also made a clear commitment that we will continue to defend Canada's system of supply management."

Original Article
Source: Ottawa Citizen