Trade Minister Sees Rocky Road Ahead

Federal Trade Minister Chrystia Freeland maintains that no matter the course of other countries, Canada will remain committed to free trade and to openness in immigration. While protectionist forces elsewhere sandbag their borders, she says, we’re going to pursue new trade agreements, promote Canada as a destination for foreign direct investment, and forcefully support our export sector.

The Liberal government appears to be seeing opportunity in adversity – a chance to show that Canada is special (to use Freeland’s word), and perhaps more noble. As evidence, she has glowingly quoted The Economist, a publication she used to write for, which opined in October that "the world owes Canada gratitude for reminding it of what many people are in danger of forgetting, that tolerance and openness are well-springs of security and prosperity."

Freeland snatched a victory on the Canada-European Union trade agreement (CETA) from the jaws of defeat at the hands of the Walloons last year. She is about to begin exploratory talks with China on a free trade agreement, and she has pledged to beef up Canada’s investment in trade promotion. In November, she signed Canada on to the Trans-Pacific Partnership (TPP), now that the U.S. has pulled out.

Plus, the death of the TPP and the U.S. president-elect’s frostiness towards China on trade (and Taiwan, and the yuan, and so on) probably do represent an opportunity for Canada to deepen trade ties with the Far East.

Experts say that if Canada really aims to be a beacon of anti-protectionist hope, it would be nice if it would make a clear, strong and public commitment to acting unilaterally in the name of trade liberalism. New Zealand, for example, in the 1980s, got rid of a slew of agricultural tariffs and subsidies – which once accounted for nearly 40% of farmers’ income – to significant benefit to both agriculture and the economy.

In the end, experts say we need to recognize that protectionism is a form of economic self-harm that politicians trot out as a form of self-defence. Thus, Canada should pursue more open trade relationships. But as the United States seems bent on going the other way, Canada should limit her expectations.