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February 18, 2017
OverviewCanada continues to enter international trade agreements, many of which have controversial provisions that some industries find damaging. This raises questions about whose interests are considered when these deals are made and also what concessions should Canada and Canadians make to be a part of these agreements.
Canada’s engagement in international trade and investment is highly political, effecting groups at home and abroad. Canada cannot do without free trade, yet it is important to balance economic interests with social, cultural and environmental concerns.
As the opposition to the TPP and CETA have shown, this new generation of trade deals has been highly controversial due to their expansive nature - these are not trade agreements in the traditional sense, aiming primarily to reduce tariffs on foreign goods. Instead they serve as instruments for the protection of investors’ rights, as well as allowing them to sue the government of Canada before private tribunals. Given the potential impacts, the public should be informed on the content of these agreements and wider range of groups should be allowed input into the treaty negotiation process. Canada is not only a recipient of foreign investment, but acts as a “home country” sending investment abroad and engaging in trading relationships with developing countries. These relationships can be mutually beneficial, but Canada’s developing country partners would likely be best served by an approach that focuses on fairer “rules of the game”, for example by not insisting on developing country liberalization while maintaining protection in domestic sectors such as agriculture.
Similarly, Canada often claims that its overseas investment contributes to development, particularly in the mining sector. For example, the Harper administration heavily promoted the idea of corporate social responsibility’s (CSR) potential to contribute to the development of the countries where Canadian companies mine. However, voluntary CSR is not enough to offset the destructive practices of mining companies. Therefore the government should, given its significant diplomatic efforts to promote the industry abroad, insist on higher levels of accountability, perhaps by insisting overseas operations comply with Canadian law. At the same time, this idea has faced significant resistance by government and industry actors, as well as significant practical obstacles to its implementation. Thus, addressing the issue of the impact of Canadian mining companies abroad remains a challenge, and requires constant vigilance by civil society actors.show less
Between Britain voting to leave the European Union and Donald Trump’s victory in the US Presidential election, the voices of those questioning globalization were loudly expressed in 2016. In Canada, the backlash against economic integration has been more muted, and in fact the Liberal federal government made a strong eleventh-hour push to save the Comprehensive Economic and Trade Agreement (CETA) signed with the European Union in October 2016. Can this deal lead to “inclusive growth,” as the Liberals suggest?
The question isn’t so much about growth as it is about inclusivity. Unions and other left critics would stress that the economic benefits of free trade deals like CETA, the Trans-Pacific Partnership (TPP) or the North American Free Trade Agreement (NAFTA) mostly go to the wealthy. It is not just coincidence, in this view, that there has be a sharp rise in income inequality – especially the income share of the richest 1% of Canadians – in the period since the Canada-US Free Trade Agreement came into effect in 1989. The Liberals have claimed that CETA is different, setting the “gold standard” for “progressive” trade agreements. It will be some time before such claims can be assessed, of course. For now, unions can take some solace in the fact that a Trump election victory has likely meant the end of the TPP. If NAFTA is renegotiated, however, it’s doubtful that Trump and Canadian unions will remain strange bedfellows for long.show less
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