Canadian Trade Policy under the Liberals-Some Ideas

By | April 5, 2016

As Canada becomes more and more assertive in international markets, particularly the expanding export reach of our SMEs, we need to consider aspects of our strategy aimed at dismantling foreign trade barriers. Preferential trade agreements like the Trans-Pacific Partnership Agreement (TPPA) and the Canada-EU Comprehensive Economic and Trade Agreement (CETA) are one way but there are other instruments and mechanisms that can be employed, including efforts at the political and diplomatic level.

The first step in opening some of these markets is to understand the nature and depth of barriers to Canadian goods, services and investments around the world.

The Department of International Trade, now part of Global Affairs Canada, used to publish an annual compendium of these but hasn’t for several years. Examination of such barriers, to the extent it is done, is now wrapped up into the Department’s Global Markets Action Plan (GMAP).

GMAP was developed under the former trade minister (Ed Fast) but has been adopted by the current minister (Chrystia Freeland) as part of her mandate. The Department’s web-site site still lists GMAP as “The Blueprint for Creating Jobs and Opportunities for Canadians through Trade” and has been updated as recently as March 2016. The update includes the signing of the TPP Agreement on 4 February 2016.

The conclusion is that GMAP, at least for now, remains the official, non-partisan, consolidation of Canada’s trade priorities and, even if promulgated by a previous government, is testimony to its soundness as a policy document.

As noted above, the GMAP doesn’t turn the spotlight on actual foreign trade barriers, even though this is often the first step in identifying problems faced by Canadian companies doing business abroad. This differs, for example, with the approach in the United States, where the US Trade Representative (USTR) reports annually to Congress on barriers to US trade and commerce in its National Trade Estimates Report (NTE).

The USTR report is a combination administrative/legal document and a political document. It serves several purposes, rolling up US trade policy into a comprehensive report but – importantly – shining the spotlight on those countries USTR identifies as impeding American business and commerce in foreign markets.

To some extent, it’s a pro forma exercise but in another sense it provides ammunition to American exporters to press for action at the diplomatic and political level in addressing specific market access problems.

Take the section in the 2016 report on Canada. It reviews Canadian trade policy in general terms, then lists the differences the US has with Canada on things such supply management, aspects of the CETA the US doesn’t like (Canadian recognition of EU geographic indications), provincial support to Bombardier, etc.

None of this is particularly concerning, other than that it focuses attention on some Canadian measures the US doesn’t like and provides opportunities for affected industries to press their political representatives for action.

Interestingly, nothing is said in the 2016 report about softwood lumber or other Canada-US trade irritants or, on the positive side, about the advances made in coordinating bilateral border measures in the Beyond the Border initiative.

That being said, the NTE report can be part of the arsenal available to US companies in pressing for governmental action, leading to the suggestion that Canada’s Trade Department, in spite of resource constraints, should consider re-instituting something similar.

While this in itself won’t reduce barriers faced by Canadian business, it would provide a helpful compendium, particularly SMEs, in gaining insights into where the most serious problems are encountered. Over time, this could help focus Ottawa on the need for governmental action to reduce or eliminate those barriers.