About that border deal between Canada and the U.S.

By Luiza Ch. Savage - Thursday, December 8, 2011 at 12:02 AM - 0 Comments

Amid the pageantry of a joint appearance at the White House alongside President Obama, the prime minister on Wednesday touted the new border security agreement in grandiose terms: the “most significant steps forward in Canada-U.S. cooperation since the North American Free Trade Agreement.” The agreement, though, is less a single leap than a series of many incremental gains, say the technocrats who labored in the shadows to put the multifaceted deal together. One Canadian official likened border negotiations to the cliché about football—it’s a “game of inches.” And this agreement covers a lot of inches—including myriad new ways in which the two nations will share data about travelers and cargo, the promise of a single on-line portal for importers and exporters who today have to schlep paper documents to a variety of government agencies, and pilot projects that will allow certain kinds of pre-inspected cargo to cross the border without stopping. It also includes a border wait-time measurement system and an inventory of border fees to help citizens and policy makers understand how well things are working—or not.

There is no doubt that Canadian officials have learned their lesson from years of trilateral “Three Amigos” summitry that resulted in lengthy bureaucratic to-do lists and more controversy than results. This time, they cut out Mexico, instead running a bilateral process focused on a limited number concrete high-impact results that could be implemented in a short period of time. Rather than endlessly negotiating over grand policy changes, they agreed to more modest pilot projects in complicated areas such as land border-preclearance in order to “build confidence” and demonstrate tangible results on the ground. Continue…

‘No good purpose is served’

By Aaron Wherry - Thursday, August 11, 2011 at 11:33 AM - 26 Comments

In Colombia yesterday, the Prime Minister attacked critics of free trade with the country.

“No good purpose is served in this country or in the United States by anybody who is standing in the way of the development of the prosperity of Colombia,” said Harper. ”Colombia is a wonderful country with great possibility and great ambition. And we need to be encouraging that every step of the way. That’s why we have made this a priority to get this deal done. We can’t block the progress of a country like this for protectionist reasons.”

… Opposition to the trade deal has come from critics such as the federal NDP in Canada. Similarly, U.S. lawmakers have dragged their feet on approving a similar free-trade deal with Colombia, citing concerns over human rights. But Harper scoffed at those concerns, calling them a phony excuse. ”I think there are protectionist forces in our country and in the United States that don’t care about development and prosperity in this part of the world. And that’s unfortunate.”

The free trade deal with Colombia was the subject of extensive debate in the House: see here, here, here, here, here, here and here.

When I was reporting this piece on the House of Commons, MPs were debating a deal with Panama. The discussion I sat in on then—including debate between Scott Brison and Peter Julian and later Joe Comartin and Brad Trost—dealt with many of the same points of contention.

Canada set to seal EU free trade deal

By macleans.ca - Friday, July 15, 2011 at 12:22 PM - 15 Comments

International Trade Minister Ed Fast says Canada is headed toward closing a free trade deal with the European Union by 2012. Fast says “important progress” was made during eighth-round negotiations with the EU in Brussels this week. A ninth round of talks will take place in October. Fast suggested Canada is willing to offer the EU significant compromises on goods and government purchasing. The Harper government has focused on increasing non-U.S. trade so Canada isn’t so dependent on a single market.

The Globe and Mail

The U.S. and Canada—singing in harmony?

By Luiza Ch. Savage - Monday, May 2, 2011 at 9:30 AM - 4 Comments

Mark Wilson/Getty Images

As Target Corp., the mass retailer of trendy housewares and clothing, prepares to open hundreds of stores across Canada in its first non-U.S. expansion, it has started to grapple with the realities of doing business across the border. In a letter to U.S. Commerce Secretary Gary Locke, dated April 18, two Target executives bemoan conflicting regulations between the U.S. and Canada in areas such as product standards, testing facilities, customs procedures and documentation. “For example, the safety requirements and test methods applicable to camping tents are markedly different between the U.S. and Canada, making it difficult and cost prohibitive to provide the same product in each country,” wrote the vice-president for government affairs, Matt Zabel, and vice-president for compliance, Canada, Anthony Heredia. “These differences may result in higher consumer costs, or reduced selection.” They called on the Obama administration to focus on “greater regulatory coherence” with Canada that would “increase cross-border investment.”

The Target letter was one of 30 submissions the Commerce Department received after asking for public comments on “regulatory co-operation that would help eliminate or reduce unnecessary regulatory divergences in North America that disrupt U.S. exports.” The request for comments came after a February meeting in Washington at which President Barack Obama and Prime Minister Stephen Harper launched two joint initiatives to ease cross-border trade and travel: an overhaul of border management aimed at creating a system of “perimeter security”, and an attempt to harmonize some regulations between the two countries to help ease trade. The leaders created two working groups, one on border management and the other on regulatory co-operation, led by senior government officials, whom they instructed to hold public consultations and produce detailed action plans for each government.

The stakes are high. Canada and the U.S. have the world’s largest two-way trade relationship, worth $645 billion a year. Three-quarters of all of Canada’s exports go to the United States, and border delays cost the economy billions each year. As well, Canada is America’s largest market, accounting for one fifth of all exports, and Obama is also searching for ways to boost that trade. In his state of the union speech last year, he set a goal of doubling overall U.S. exports in five years in order to spur job creation in the struggling American economy.

Continue…

Canada threatens to scrap trade talks with EU

By macleans.ca - Tuesday, February 22, 2011 at 12:10 PM - 48 Comments

Canadian officials are threatening to pull out of trade talks with the European Union if the EU presses ahead with environmental regulations that would block imports of fuel produced from Canada’s oil sands. According to EU documents and sources, Canada has actively lobbied the commission and member states to scrap a plan that would differentiate the carbon footprint of oil sands fuel compared to fuel obtained by more conventional means. Canadian officials, meanwhile, have denied threatening to scrap the trade talks.

Reuters

Canada-EU trade deal will increase drug costs for Canadians

By macleans.ca - Monday, February 7, 2011 at 1:04 PM - 20 Comments

A new trade deal between Canada and the EU could add about $2.8-billion in annual costs to Canadian drug plans, according to a report commissioned by the Canadian Generic Pharmaceutical Association. The EU has asked for significant changes to patent laws for generic drugs, which regulate the amount of time before a generic drug company can reproduce a patented brand name drug. Patented drugs are generally more expensive than their generic counterparts. The changes include extending patent protection by up to 5 years, lengthening data exclusivity, and strengthening notice of compliance regulations. Aiden Hollis, professor of economics at the University of Calgary and the co-author of the report, said “the reasonable inference is that these changes are designed to allow innovating pharmaceutical firms to charge monopoly prices for a longer period.” Brand name drugs manufactured in the EU are a leading export to Canada, with $5.3-billion in pharmaceutical products imported by Canada from the EU in 2009.

The Globe and Mail

Border announcement to focus on trade

By Luiza Ch. Savage - Friday, February 4, 2011 at 2:30 PM - 0 Comments

The border announcement today will include the creation of a Council to review regulations with an eye to streamlining and helping facilitate trade. I’m told this is in part an extension of Obama’s domestic initiative to review regulations. He talked about it in the State of the Union.

A good deal, but what about the drugs?

By Cameron Ainsworth-Vincze - Thursday, October 14, 2010 at 2:00 PM - 0 Comments

Paolo Pellegrin/Magnum Photos

India’s dream of becoming an economic powerhouse will take a giant leap forward later this year with the scheduled signing of a bilateral free trade agreement with the European Union. The goal of the agreement is to triple the existing $74-billion trade flow between the two regions over the course of the next five years. Yet one outstanding issue is drawing considerable backlash, at home and abroad.

The agreement, according to a new study in the Journal of the International AIDS Society, could significantly harm India’s generic drug industry, which supplies 80 per cent of the cheap, anti-retroviral drugs (ARVs) that are sold to low- and middle-income countries. The study, which contains data from more than 17,000 donor-funded purchases of ARVs by 115 countries, suggests that negotiations between India and the EU have included measures that could delay, or in some cases restrict, generic medicines from reaching certain regions due to product patent restrictions, data requirements and tighter border rules. Such a move could significantly increase the cost of India’s ARVs, in addition to limiting dosage availability and delaying access to newer and more advanced drugs, the study argued.

Continue…

Wanted: free trade activists

By Thomas Watson - Thursday, July 1, 2010 at 11:40 AM - 11 Comments

Virginia Mayo/AP

Canadian Trade Minister Peter Van Loan wishes the mainstream media would pay more attention to the anti-globalization crowd. After all, if trade naysayers made the front page of national papers more often, then more people might realize Canadian trade negotiators are well on their way to making history with an ambitious plan to better integrate our national economy with the European Union. As Van Loan points out, the Council of Canadians, which claims a deal with the EU could threaten Canadian access to safe drinking water, recently held “a wonderful news conference” to voice its concerns—but it got virtually no media pickup. “I was actually disappointed,” Canada’s trade minister says, “because there should be more of a spotlight on these negotiations.”

True enough. If all goes as planned, Canada will become the first developed nation to land a free trade agreement with the economic grouping of 27 European nations sometime next year. The EU—the world’s largest market, not to mention home to the wealthiest pool of investment capital and some of the largest and most important companies on the planet—is already Canada’s second-largest source of trade and foreign direct investment. In 2008, Canadian exports to the EU totalled $52 billion. Imports amounted to $62 billion. But there appears to be plenty of room for growth. After all, the Canadian economy is 150 per cent larger than the Indian economy, which has similar trade levels with the EU. Furthermore, Europe trades about 25 per cent more with South Korea, which has a smaller GDP than Canada.

Continue…

The Conservative-Liberal coalition

By Aaron Wherry - Wednesday, June 2, 2010 at 10:55 AM - 16 Comments

Two months ago, the International Trade Minister happily watched as Scott Brison negotiated directly with Colombia to complete a free trade deal. This week, the Immigration Minister happily accepts Maurizio Bevilacqua’s amendments to the immigration reform bill.

Conservatives, Liberals, and the Colombian free trade deal

By John Geddes - Thursday, March 25, 2010 at 12:26 PM - 22 Comments

The government’s decision yesterday to accept a Liberal amendment to its free trade agreement with Colombia is being touted by the main architect of the side deal as a case study in how a minority Parliament should work.

Liberal MP Scott Brison, his party’s international trade critic, proposed the amendment to that would see Colombia produce an annual report, with Canadian input, on how the free trade agreement affects human rights.

Trade Minister Peter Van Loan accepted Brison’s proposal, and no wonder, since it guarantees that the Conservative minority in the House will now be backed by Liberal votes on this issue, enough to get legislation enacting the trade pact passed.

Continue…

Maybe not the whole nine yards, but a few

By Andrew Coyne - Thursday, March 4, 2010 at 10:43 AM - 19 Comments

That was one of the more economically literate Speeches from the Throne in recent memory, even at the cost of saying rather little (and taking rather too long to say it). But what was there was at least mostly in the right direction.

Throne Speeches are tricky things. Lines that seem innocuous turn out to be freighted with meaning. Momentous-sounding announcements turn out to mean not much at all, or never make it into legislation. A pledge to “reform and strengthen education,” for example — meaningless boilerplate, or the beginnings of a national education strategy? An “aggressive” plan to “close unfair loopholes” — a couple of technicalities of interest only to accountants, or wholesale tax reform?

Still, the general tendency of the Speech, at least in its economic chapters, was clear: smaller government, freer trade, less intervention in markets. If hardly a major change in direction — did anyone think that’s what “recalibration” meant? — it does signal the government is turning up the volume on some conservative economic themes that had hitherto been buried in the mix. The government can read the opposition’s body language as well as anyone, and can see they are not spoiling for an election. So it has taken the opportunity to steal a few yards for conservativism, without being unduly provocative.

Indeed, it’s an achievement of sorts that so much of the reaction to the Speech seemed to be in the ho-hum, is-that-all-there-is vein. For it contains at least a couple of potentially important policy initiatives. Opening the doors to foreign investment “in key sectors,” including — but not limited to — telecoms and satellites, is the most startling, even if it was telegraphed in advance. Not long ago this would have been considered a political third rail, and yet it seemed to occasion very little response from the opposition. Good: aside from offering greater choice and competition for consumers, foreign investment will be a vital source of the capital needed if Canada is to improve its dismal productivity performance — as it must, to pay for the coming wave of baby-boom retirees.

The other potentially significant development was the pledge to freeze departmental operating budgets. Again, this seemed to escape notice, with most commentary focused on the symbolic but fiscally insignificant salary freezes imposed on ministers and MPs. But a freeze on departmental budgets, depending how long it is in force, could mean quite sharp cuts in spending in real terms — not enough, certainly, to balance the budget on their own, but perhaps a sign of what is to come in the budget.

It had better. Despite the nod to restraint, the Throne Speech maintains the government’s official line that the budget can be balanced without either raising taxes or cutting transfers to the provinces and elderly. It’s true that you can grow your way out of a deficit, if you don’t care how long it takes: give it 10 straight years of growth, and even the worst profligate can balance its books. But the more leisurely the schedule, the greater the chances of a recession or other unexpected event wrecking all those pleasing fiscal forecasts. And of course, the longer you take to stop adding to the debt, the higher it climbs.

What we need is a serious plan to balance the budget in three or four years, that is within the usual economic or political cycle, coupled with a strategy to tackle the longer-term demographic challenge. That will certainly require either significant cuts in spending or substantial tax increases. I’ve argued it can and should be done by cutting spending. But whether it’s one or the other (or both), it can’t be neither.

A couple of other important omissions from the speech. On the plus side, there were almost none of the usual giveaways to politically powerful industries. To be sure, there was the expected list of shout outs to the forestry, fishing, and farming sectors. But rather than shower them with subsidies and special treatment, the speech proposed to help them by cutting red tape and opening new markets: what might be called “small government activism.” (The glaring exceptions: shipbuilding and supply management.)

More distressing was the absence of any mention of the economic union. To be sure, there is a pledge to press ahead with the creation of a national securities regulator, in place of the current provincial hodgepodge. But until lately the government had much more ambitious plans. A previous Throne Speech, in 2007, vowed to take aggressive action to dismantle provincial trade barriers if they did not do so themselves, if necessary by use of the federal “trade and commerce” power under the Constitution. The Conservative election platform in 2008 added a deadline to this commitment: 2010. Well, here it is 2010, and in a document devoted to competition, productivity and free trade there is no mention of the economic union.

Fine words, as they say, butter no supply-managed parsnips.

FOR THE RECORD: Here’s what the October 2007 Throne Speech had to say about the economic union:

Our government will also pursue the federal government’s rightful leadership
in strengthening Canada’s economic union. Despite the globalization of
markets, Canada still has a long way to go to establish free trade among our
provinces. It is often harder to move goods and services across provincial
boundaries than across our international borders. This hurts our competitive
position but, more importantly, it is just not the way a country should
work. Our government will consider how to use the federal trade and commerce
power to make our economic union work better for Canadians.

And here’s that 2008 platform commitment:

A re-elected Conservative Government led by Stephen Harper will work to eliminate barriers that restrict or impair trade, investment or labour mobility between provinces and territories by 2010. In 2007, the government announced that it was prepared to use the federal trade and commerce power to strengthen the Canadian economic union. Since that time, we have seen progress among the provinces and territories in strengthening the existing Agreement on Internal Trade. We hope to see further progress, but are prepared to intervene by exercising federal authority if barriers to trade, investment and mobility remain by 2010.

Ask Andrew transcript

By Andrew Coyne - Tuesday, November 3, 2009 at 12:56 PM - 12 Comments

• Andrew Coyne:
  Hello, everybody. Coyne here. Fire when ready.
• Crusk:
  Hi Andrew. In the past you have argued for a decrease in personal income tax, but why would a decrease in corporate taxes while maintaining high income taxes not be a better answer to productivity and equality concerns?
• Andrew Coyne:
  Well, of course, we could do both. Ultimately, all taxes are paid by people, so whether you cut corporate or personal income taxes is not hugely important — either way, what you want to do is make sure that the tax burden is spread fairly, and spread evenly, with as few exceptions or preferences as possible.
  What I’d really like to see is a rebalancing away from income taxes altogether, in favour of consumption taxes, which are far less damaging to economic activity.
• Critical Reasoning:
  Andrew, what are your thoughts on the Charles and Camilla visit? Do you think there is still a broad base of support for the monarchy in Canada?

Continue…

Canada’s biggest problem? America

By Luiza Ch. Savage - Wednesday, October 7, 2009 at 8:00 AM - 130 Comments

It has been almost two years since Stephen Harper disclosed that his cabinet was having serious discussions about what to do to “restore the special Canadian and American relationship” that he said had become “lost” in the Bush years. “What has happened is that Canada lost that special relationship with the United States. We increasingly became viewed as just another foreign country, albeit an ally, a good friend, but nevertheless a foreign country. You know, the northern equivalent of Mexico in terms of the border,” the Prime Minister told Maclean’s in an interview back in December 2007. “That isn’t just a shift in the view of the administration, that’s somewhat a shift in American public opinion as well, which concerns me.”

At the time, Harper was preoccupied with a new passport requirement that threatened tourism and trade, adding a new scale to the ongoing red-tape “thickening” of the world’s longest undefended border. “I’m certain this trend will not be reversed in the lifetime of the current American administration,” Harper said at the time. “I’m more optimistic it will be deferred later by a new administration.” But, he added, “I’m far from sure.” Continue…

Why free trade with the EU goes nowhere

By Paul Wells - Friday, July 17, 2009 at 11:00 AM - 31 Comments

The occasion was a recent economic conference in Montreal. The place was crawling with reporters, but the president of Colombia was in town so none of the reporters bothered to attend one particular breakfast session. Well, almost none.

The topic at the breakfast was trade between Canada and the European Union. Guests included Roy McLaren, the former trade minister under Jean Chrétien, who runs something called the Canada-Europe Round Table. Also Ross Hornby, Canada’s ambassador to the EU. Continue…

Where have you gone John Turner?

By Aaron Wherry - Thursday, May 7, 2009 at 12:46 PM - 20 Comments

Adam Radwanski wonders why no one’s asking questions about free trade with Europe.

The fact that yesterday’s Question Period yielded nary a single question on this matter, on the day that the Prime Minister was meeting with European officials in Prague to discuss it, is rather telling of the ability of that forum to shed light on the government’s activity.

Granted, the answers would probably all have come back to the scurrilous Liberals’ dastardly plans to raise taxes. But if opposition politicians felt no compulsion to at least attempt to find out what the government is aiming for and how it’s progressing, I’m really not sure why they bother going to work each day.

The crossroads of international trade

By Andrew Coyne - Thursday, September 18, 2008 at 11:27 PM - 60 Comments

I’m sorry, but this is huge. Huger than huge. Hugeastic. Hugeriffic.

Canadian and European officials say they plan to begin negotiating a massive agreement to integrate Canada’s economy with the 27 nations of the European Union, with preliminary talks to be launched at an Oct. 17 summit in Montreal three days after the federal election.

Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”

If successful, Canada would be the first developed nation to have open trade relations with the EU, which has completely open borders between its members but imposes steep trade and investment barriers on outsiders…

A pact with the United States would be politically impossible in Europe, senior European Commission officials said.

Understand what this means. If we pull this off, then Canada would be the only developed country (Mexico has its own deal) with guaranteed access to both the European Union and the United States — the two richest markets in the world, with 800 million consumers between them. Locating in either the US or the EU would give a firm guaranteed access to only one. Only by locating in Canada would they get both.

It also brings with it the usual benefits of free trade, notably cheaper prices and greater selection for consumers. And this:

The proposed pact would far exceed the scope of older agreements such as NAFTA by encompassing not only unrestricted trade in goods, services and investment and the removal of tariffs, but also the free movement of skilled people and an open market in government services and procurement – which would require that Canadian governments allow European companies to bid as equals on government contracts for both goods and services and end the favouring of local or national providers of public-sector services.

But it’s the strategic advantages that are so compelling. Now imagine that we also sign a free-trade agreement with India (or Japan), as the Canadian Council of Chief Executives, among others, have recently advocated. We would stand at the crossroads of international trade and investment.

And if other countries should join us? So much the better. We lose our initlal strategic advantage as the unique point of intersection. But we gain from having more trading partners — and we have the pleasure of knowing that we’ve helped to propel the world closer to the ideal of universal freedom of trade. 

Now that’s a vision I can get behind. Continue…

Megapundit: Free trade in chicken eggs or bust!

By selley - Tuesday, July 29, 2008 at 12:54 PM - 0 Comments

Must-reads: Jeffrey Simpson on trade hypocrisy; Gary Mason on aboriginal progress in the Yukon; Andrew Cohen on summer camp.

Bitch, bitch, bitch
This just in: we’re a bunch of protectionist, defeatist sheep. Discuss.

Jeffrey Simpson is back in a foul temper, and The Globe and Mail is better for it, we feel. Today he decries our hypocritical stance on world trade, which involves demanding “other countries lower their subsides and protection for agricultural products that we export … while insisting that whole sections of Canada’s agricultural market remain effectively closed to imports”—notably poultry, eggs and dairy, which are subject to gigantic import tariffs. Since there’s no political courage to anger farmers—particularly in Quebec, which benefits most from this “across-the-board, across-the-country racket”—and no groundswell of public opposition, Simpson says the only hope is that ongoing trade talks establish a framework in which Canada will simply be forced to change.

The Halifax Chronicle-Herald‘s Dan Leger believes we’re becoming “a society of complainers and defeatists,” noting our fatalistic tendencies on Afghanistan (“we can’t do anything to help … so we shouldn’t even try”), law-and-order (“let’s just clean up the blood and punish the perps,” and never mind root causes), the economy (“we can’t stand on our own feet economically, so let’s shut our doors to foreign trade and investment”), and culture (“let’s just be tax-averse Neanderthals”). He concedes the media may have played a teensy role in creating this atmosphere, and rendering politicians fearful of espousing any big, new ideas.

Continue…

Obama: NAFTA not so bad

By Luiza Ch. Savage - Thursday, June 19, 2008 at 3:15 PM - 0 Comments

My friend, the wonderful Nina Easton, has an interview with Barack Obama in Fortune magazine that looks like a bit of a defensive move aimed at a business audience ahead of John McCain’s free trade speech in Ottawa tomorrow.

Nina writes: ” In an interview with Fortune to be featured in the magazine’s upcoming issue, the presumptive Democratic nominee backed off his harshest attacks on the free trade agreement and indicated he didn’t want to unilaterally reopen negotiations on NAFTA.

“Sometimes during campaigns the rhetoric gets overheated and amplified,” he conceded, after I reminded him that he had called NAFTA “devastating” and “a big mistake,” despite nonpartisan studies concluding that the trade zone has had a mild, positive effect on the U.S. economy.

Does that mean his rhetoric was overheated and amplified? “Politicians are always guilty of that, and I don’t exempt myself,” he answered.

Obama says he believes in “opening up a dialogue” with trading partners Canada and Mexico “and figuring to how we can make this work for all people.” ”

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Did we all see this coming, or what?