On free trade, Harper needs to show some true grit

This government has been very aggressive about announcing free trade deals–not so much about closing them

On free trade, Harper needs  to show some true grit

Sean Kilpatrick/CP

Listen to his critics and you’d think a blinding “neo-conservative ideology” is what motivates Prime Minister Stephen Harper these days. Yet in sifting through his six years in power it’s much easier to find evidence of opportunistic pragmatism than any specific ideology.

Regardless of this week’s budget, the Harper government has already proven itself to be the biggest spending government in Canadian history. And while it talks a lot about taxes, Ottawa is actually creating a more complicated and less efficient tax system through its creation of myriad tax credits aimed at tiny slices of the population for such things as children’s dance lessons, team sports, work tools or public transit.

The federal government has also been quick to remove the right to strike from unionized workers—the widespread animosity of the current Air Canada labour dispute is directly attributable to this instinct for control over letting negotiations take their course. It has, as well, interposed itself into deals between interested buyers and sellers, such as with the Potash Corp. decision. None of this is the stuff of standard economics textbooks.

There is really only one area of economic policy in which Harper appears to have retained his much ballyhooed enthusiasm for unfettered markets. And that’s free trade. But does he have the courage to follow this enthusiasm with real progress?

The Prime Minister has been unveiling free trade deals at a rapid pace. During his trip to Asia last week he stopped in three countries and announced two new rounds of trade talks—one each in Thailand and Japan. At the same time, International Trade Minister Ed Fast was making an announcement on a potential deal with Brazil, Argentina, Uruguay and Paraguay.

Late last year Canada also asked for a seat at the Trans-Pacific Partnership (TPP), a group of nine countries comprising the United States, Australia, New Zealand, Singapore, Peru, Vietnam, Malaysia, Brunei and Chile, that promises to revolutionize Asian trade relations. And Canada is deep into free trade talks with the European Union, currently the largest trading bloc in the world.

The possibility of having Canada’s signature on the world’s three largest regional trade deals—the TPP and EU plus the pre-existing North America Free Trade Agreement—presents the prospect that Canada could soon define itself as a trading nation sine pari. For a country with ample natural resources and unlimited capacity for growth, but a relatively small domestic market, trade remains the surest route to our economic success. Yet there’s more to becoming a free trader than simply issuing press releases.

“This government has been very aggressive about announcing free trade deals,” observes trade expert Michael Hart of the Norman Patterson School of International Affairs at Carleton University in Ottawa. “But they haven’t been quite so aggressive in finishing trade deals.” If he intends to close any of these recently announced deals, Harper must soon confront the elephant in the corner of the trade agreement room—or rather, the cow.

Hart points out that many previously announced free trade deals remain in suspended animation due to major objections at home that are not going to go away easily. A free trade deal with South Korea, for example, is hung up over complaints from the auto sector. And Canada’s participation in the much larger and more significant TPP may be conditional on unwinding domestic agricultural quotas in dairy and poultry, something Harper has previously said he will not do.

Clearly Harper needs to start making some difficult choices. Those disadvantaged by free trade obviously deserve fair consideration and ample time to plan, but they cannot be allowed to hold up progress for the rest of the economy. If the Prime Minister is serious about putting his free trade convictions into practice, he is going find himself in direct conflict with politically savvy, status quo-loving opponents such as auto workers and farmers. This will require that he abandon his current preference for low-key pragmatic populism in favour of a bigger helping of conservative grit and confrontation.

Harper is quite right when he declares that Canada is a trading nation. Now we need to see how serious he is about making that trade freer.

Barbara Amiel’s look at the cutthroat world of purebred dogs in our April 2 issue (“Chasing perfection,” Society) received an overwhelming response. This week, we are following up with a special iPad feature, reproducing the story with additional photos and featuring an exclusive video interview with Amiel at her Toronto home—her first one-on-one, on-camera interview in years. Amiel talks about her motivation for writing the article and her passion for dogs, including her two loyal Hungarian kuvasz. Next week, watch for an iPad extra featuring a video interview with Dan Hill.




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On free trade, Harper needs to show some true grit

  1. “And Canada’s participation in the much larger and more significant TPP may be conditional on unwinding domestic agricultural quotas in dairy and poultry, something Harper has previously said he will not do.”

    And yet, the TPP includes the United States, who subsidize their agricultural sector to a larger extent than nearly any other country in the world (save, perhaps Cuba?). I don’t have a problem with Canada giving up supply management in the name of free trade, but if we were to do so without the US committing to follow suit with regard to corn and soybean subsidies, we’d be complete fools.

  2. Hmmmm…..  When Harper became PM in 2006 Canada had free-trade agreements with only five countries – currently we are in negotiations with fifty.  What have all the graduates of Norman Patterson School of International Affairs been doing the last forty years???

    I’m looking forward to the TPP negotiations.  Harper is no dummy. 

    “Obama, however, hinted that Canada may have to be more flexible.

    “Every country that’s participating is going to have to make some modifications. That’s inherent in the process because each of our countries have their own idiosyncrasies, certain industries that have in the past been protected,” Obama said.

    “I don’t think Canada would be unique in that. Are there areas where we’d like to see changes in terms of Canadian practices? Of course. I assure you Canada would have some complaints directed at us.”

    Listen to him speaking at the Wilson Center to an American audience Monday.

    http://www.cbc.ca/news/politics/story/2012/04/02/harper-3amigos.html   

  3. My complaint exactly.

    It’s no good ‘announcing’ negotiations and then never following through, and it’s no good having trade deals with countries like  Liechtenstein.

    China, India, S Korea, the TPP… is what we need.  Go big, or go home.

  4. Typically free trade has two relatively separate elements.  The first one is the elimination of import and export tariffs, which has been largely accomplished in most markets.  The second element is the elimination of production subsidies, which tends to be political suicide.  Until the US & EU actually reduce their subsidy levels, (ie, a government commits political suicide) signing anything binding is a bad idea for any less powerful country.

    Out of curiosity, besides unionized workers & supply-managed producers, is anyone besides the uber-rich actually earning any money in this country?

  5. Almost 25 years of steady economic decline and devastation of the middle class under GATT, NAFTA and the WTO, and you’re STILL trying to sell this garbage.  But then again, people keep buying it, so maybe we deserve what we get.

  6. Generations of Canadians have been savagely ripped off – paying twice or three times what Americans do – for milk, chickens and cheese, bringing up healthy families.  It’s been decades of government-sanctioned and organized theft, plain and simple, to appease a few small political pressure groups.

    Every chance I get, I’m over in Washington State to load up on chickens for the freezer at $.99 per pound instead of $2.99 in BC.  Superb cheese, at $7.50 a pound, instead of simply never buying cheese in Canada.  Milk is half the price or less than in Canada.

    Supply Management must go.  Surely a majority conservative government can see the benefit of giving all Canadian families a significant break on their food bills, at the cost of maybe a few thousand dairy and poultry farmers votes in Quebec and Ontario.

    • Spot on.

      One gaming PC mouse in the U.S. – $41.99 with free shipping
      Same gaming mouse in Canada?   – $59.99 and pick it up yourself.

      That’s a whopping 142% we pay for the same thing.

    •  …and don’t even get me started on the savagely inflated prices Canadians pay compared to the U.S. for cell phone or cable providers!

      We’re supposed to be the gas and oil resource country, so why do Albertans have to drive south to fill up for far less? Refine our own. Venezuelans and UAE pay reduced gas prices.
      Where is the Canadian advantage? Why don’t they give Canadians a ruddy break?

    • amen, supply management is a hidden tax that the public needs to know about.

  7. Harper is first and foremost, a song and dance man.  Anything, at any cost for publicity.  Remeber the photo of him tripping/flying down the stairs at the G-20 in Germany, when he realized Merkl was at the front and camera’s clicking?
    That’s as far as harper will get on the free trade issue; photo ops.

  8. Ya, right, just look how great “NAFTA” turned out to be for us and mexico. ?
     We have gotten totally screwed by that. And we all know that for a fact.
    Geezus, “true grit” is definitely a trait Harper was NOT gifted with during his puberty years, and onward.
     Why doesn’t Harper start by ripping up that NAFTA-agreement and lets start from scratch with a more modern one, that doesn’t cripple our economy.  But again, that would require “true grit”.
     sooo, forget it.

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