Forum

Register

Preferential Trade Agreements Vs. Multilateralism: In The New Trump-World, Does Canada Face An Impossible Choice?

Judit Fabian
Visiting Researcher, Graduate School of Public and International Affairs, University of Ottawa

International trade is often framed in starkly divergent terms: either economies choose multilateral trade agreements (MTAs) and advance the cause of global economic liberalization, or they choose preferential trade agreements (PTAs) and put the entire system at risk. Canada has a long track record of pursuing PTAs and with the Trump administration’s opposition to multilateralism, and longstanding opposition in elements of the Republican and Democratic parties, this trend will likely continue. The question is whether progress will come at the expense of the global trade system.

Some economists believe PTAs to be trade-diverting, reducing trade with more efficient producers outside the agreement. Others insist that PTAs can create trade by shifting production to lower-cost producers in one of the participating economies. One prominent contrary argument holds that PTAs lead to discontinuities in tariff regimes between economies and regions, increasing transaction costs, disrupting supply chains, creating opportunities for corruption and harming global welfare, especially in developing economies.

Continue reading
  1051 Hits

Canada's "Progressive" Trade Agenda: Let's be careful how far we push it

Hugh Stephens
Distinguished Fellow, Asia Pacific Foundation of Canada
Vice-Chair of the Canadian National Committee for Pacific Economic Cooperation (CANCPEC)

 

Back in October of 2016 when the Canada-EU Comprehensive Economic and Trade Agreement, (CETA) was on the cusp of closure, the negotiations hit a roadblock when the Belgian region of Wallonia blocked the necessary consensus for the EU to conclude with Canada. Chrystia Freeland, who was then the minister of international trade, walked out of the negotiations in Brussels and packed her bags to return to Canada. She lamented that “… it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada, even with a country as nice and as patient as Canada.” A core element of her argument was that Canada and Europe shared common values, and therefore the path to an agreement should have been open. As we know, a compromise satisfied Wallonia’s concerns, mainly regarding the so-called investor-state dispute settlement process which allows foreign invested companies to sue governments for alleged discriminatory practices that negatively impact their investments. Canada and the EU went on to sign the agreement, most of whose provisions came into effect on Sept. 21, 2017. The government of Canada has cranked up its communications machine and is touting CETA as “a progressive trade agreement for a strong middle class”.

Continue reading
  4844 Hits

The trouble with Canada’s ‘progressive’ trade strategy

Hugh Stephens
Distinguished fellow, Asia Pacific Foundation of Canada
Vice-Chair of the Canadian National Committee for Pacific Economic Cooperation (CANCPEC)

 

It hasn’t been a good few weeks for the Trudeau government’s “progressive” trade agenda.

First, the unwillingness of some countries to swallow elements of the progressive agenda was at least partially responsible for the sudden postponement of an announcement around the Trans-Pacific Partnership (TPP) last month in Vietnam. The announcement was expected to confirm that the 11 TPP economies had reached an agreement in principle to conclude the pact.

Then an expected agreement on the start of free trade talks with China did not materialize during Justin Trudeau’s Beijing visit earlier this week, blocked by Chinese objections to including “progressive elements,” such as labour and gender rights, in the negotiations.

In both cases, talks have not been completely derailed, but it is fair to say the outcome is not what was expected. And in both instances this progressive agenda has been fingered as a principal cause.

Given the fact that progressive trade is proving controversial, it is worth examining what the concept actually means. It has become the term of choice for the Trudeau government, a branding exercise that seeks to distinguish the Liberals from the Harper government. The thinking then goes, if the TPP — negotiated by the Conservatives — was unpopular with some elements of Canadian society, why not change the dial, add some “progressive” elements and even modify the name? Thus the new version of the TPP (with its 11 economy members, down from 12 since the United States backed out) is now the “Comprehensive and Progressive Trans-Pacific Partnership.”

Continue reading
  5428 Hits

You can also log in with your social media account by clicking the icons below

 

Most Popular Post

Gary HawkeMember of the Board, NZPECC [The views expressed herein are Author's own and made in reference to a commissioned research conducted by Coriolis, NZ]   “Any discussion today of internati...
Andrew ElekAustralian National University (ANU)   Some of the foundations of APEC were laid more than 40 years ago.  By 1989, the careful consensus building, based on the achievements of ASE...
Hugh StephensVice Chair, CANCPECFellow of the Canadian Defence and Foreign Affairs InstituteExecutive-in-residence at the Asia Pacific Foundation of Canada [Published in iPolitics, January 14, 2014] T...
Hugh Stephens, Vice-Chair, CANCPEC Don Campbell, Co-Chair of PECC and Chair, CANCPEC Published: December 12, 2013 in Canada-Asia Agenda Abstract: On October 18, Canada and the EU announced an agreemen...
Federico Macaranas Professor, Asian Institute of Management, Manila, the Philippines The BALI airport temporarily closed for commercial flights for security reasons, even as a new $300-million termina...