OTTAWA – With the federal budget only weeks away, a new study is urging the federal government to quickly ratify trade agreements with Europe and Pacific nations and refocus efforts to grow so-called knowledge-based services.
“Going forward, trade can be a powerful antidote towards the results of the oil price shock along with other domestic vulnerabilities, such as high personal debt, by supporting development in incomes,” said Daniel Schwanen, in a study released Thursday by the C.D. Howe Institute.
“Canada is a nation of traders and Canadians realize that more open trade improves their standards of just living,” he explained. “With expanded market access come increased opportunities for growth, and also more competition, which benefits Canadians as consumers and taxpayers.”
The study, titled “At the Global Crossroads: Canada’s Trade Priorities for 2016,” argues the government needs to sign off on the Comprehensive Economic and Trade Agreement with the European Union – scheduled to come into effect sometime the coming year – and the Trans-Pacific Partnership, a contract between Canada and 11 other Pacific Rim countries.
“These two agreements represent the most crucial means available to expand Canadian business into foreign markets,” Schwanen wrote.
“Canada currently ranks 18th in the world in terms of the total size the markets our businesses get access to through high-quality agreements, past the basic access provided by WTO membership,” he explained.
“If the CETA and TPP arrived to force, Canada would transfer to fourth place, catching up with countries for example Australia which are currently well in front of us in expanding their trade links.”
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While Schwanen, the Toronto-based think-tank’s vice-president accountable for research, highlights that Canada’s “recent international performance helped cushion the blow to the economy from lower commodity prices and capital spending,” more needs to be done.
In particular, he is urging Pm Justin Trudeau to make use of his official visit in a few days to Washington to push for more bilateral trade with the United States – already Canada’s largest trading partner.
“Small regulatory differences between Canada and also the U.S. are very pricey for consumers and businesses, yet aren’t essential to ensure the safety, environmental or other standards necessary for each country,” Schwanen said. “Canada should continue to build on existing regulatory co-operation efforts between Canada and also the United States.”
Trudeau will table the Liberal government’s first budget on March 22, a document expected to show a return to spending deficits – perhaps as large as $30 billion for fiscal 2016-17 alone – aimed at buffering Canada against recessionary pressures to come the collapse of global energy prices.
Along with regulations for middle-class Canadians, your budget will earmark billions of dollars to finance infrastructure projects across the country.
In addition to shovels-in-ground priorities, the C.D. Howe study suggests the need focus more about other areas of trade – such as knowledge-based engineering and financial services.
“Canada is a nation of traders and Canadians realize that more open trade improves their standards of just living. With expanded market access come increased opportunities for growth, as well as more competition, which benefits Canadians as consumers and taxpayers.”
Financial Post
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