IssuesInternational Trade

International Trade

First Published: Sep 18, 2019
Last Updated: Sep 18, 2019
Monitored by: Roberto Chavez

Background

Looking back to the 2015 Liberal Campaign, Mr. Trudeau promised to expand export opportunities that benefit Canada, through improving relations with United States and Mexico to foster growth and consider trade opportunities with new and existing partners to reverse Canada’s trade deficit. With China and India atop of the agenda, as well as other emerging economies, Trudeau’s initial trade strategy focused on growing infrastructure, training and revamping the bureaucratic arms related to trade so-as-to provide support to industry, and negotiating new and improved markets access for Canadian products.

In the initial months of Trudeau’s mandate, then International Trade Minister Chrystia Freeland successfully maneuvered the signing of CETA, amidst multiple complications from European counterparts. Further, the Canada-US relation seemed destined to new heights given the synergy between two like-minded heads of state in Obama and Trudeau, which promised closer ties, increased trade prospects and the pursue of like-minded ideals.

Fast-track to the December 2016 U.S. election, which marked a turning point to the early Trudeau-mandate relationship with the United States, and consequently a turning point in its’ trade policy.

Once in office, President Trump was catastrophic to Mr. Trudeau's trade agenda. He pulled out of the TPP, imposed tariffs on Canadian products and renegotiated NAFTA, which has altogether frustrated Mr. Trudeau's plans and forced much of the Canadian Government’s attention to maintaining trade status with the United States as opposed to pursuing trade gains with them and other emerging economies.

In April 2017, US President Trump signed executive orders signaling a TPP withdrawal and NAFTA renegotiation. While the Trudeau Liberal Government established in its post-election mandate the objective to diversify its trade, the move by the U.S. administration exacerbated the necessity to take concrete actions to attract investment and diversify trade partners beyond the United States.

The Trudeau Government enhanced efforts to grow trade with China and India, and led the charge in negotiating the new CPTPP. Further, the Cabinet Shuffle of July 18, 2018 served for the Liberal Government to prioritize trade, investment and export promotion mandates. The shuffle saw the creation of the Minister of Small Business and Export Promotion, with a Mandate to help entrepreneurs and small businesses grow and create good middle-class jobs through trade and innovation, particularly through the promotion of export opportunities to Canadian small- and medium-sized enterprises (SMEs).

Further, The July 18, 2018 shuffle also saw a shift in the title of the Minister of Trade, with the addition of the word Diversification to the title. The change came along with the commitment to advance trade discussion with Mercosur, the Pacific Alliance, ASEAN, China, and India. As well as to continue work on implementing CPTPP, Mexico and the United States.

Current Status

To date, the Liberal Government has been successful in renegotiating its free trade agreements with United States and Mexico. While critics have praised the work done by Minister Freeland and the Trudeau Government on this regard, the ratification of the USMCA in the United States is uncertain with the Democrats in the House of Representatives holding the Bill hostage. Ratification of USMCA may have a bearing on public opinion come the election in the fall.

The Government has also successfully engaged with the Mercosur, the Pacific Alliance, and ASEAN, as well as modernizing existing agreements with Israel and Chile. Likewise, it has been unsuccessful in fostering free trade agreements with China and India.

Liberal

The LPC want to boost the number of free trade agreements, utilize them as means to drive investment and economic growth. Announcements in the way of campaign promises with concrete measures are expected in the coming weeks, particularly in what pertains greater market access to small and medium sized enterprises.

Expected key messages: successfully re-negotiated NAFTA, improve utilization of existing free trade agreements, continue to improve trade balance, and support export promotion of SMEs.

Conservatives

Andrew Scheer said a Conservative government would take a strong stance and stand up to China, only pursuing greater trade, should China embrace the rule of law system, when judicial processes which are supposed to guarantee equal market access are no longer subject to control by the government. Scheer’s initial commentary on trade also suggests that a Conservative Government would pursue trade with United States and like-minded countries as opposed to a diversification approach.

Conservatives will criticize the Trudeau Government on failure to secure trade with China and India and will campaign on increased trade with the United Kingdom and the United States.

NDP

Green Party

People's Party

Bloc Quebecois

September 18, 2019
Roberto Chavez

The Grain Growers of Canada (GGC) on September 12th called on all party leaders to unveil their plans to reopen markets that have been closed to Canada’s agriculture sector. “We are just weeks away from choosing a new federal government and we have yet to hear anything concrete regarding trade from any of our major parties or political leaders,” GGC Chair Jeff Nielsen said in a press release. “Whoever wins this election will be inheriting this situation and must have a strategy in place to address it in short order.”

September 18, 2019
Roberto Chavez

China has repeatedly declined to provide Canada with adequate scientific evidence to justify shutting the door to imports of Canadian canola, the federal government told the World Trade Organization in a new complaint.  Canada this week laid the groundwork for a challenge at the WTO of China’s ban on canola from Canada, which began in March.

The blockage of canola has been tied to a diplomatic spat between Canada and China that’s been traced to when Canadian authorities arrested Chinese tech executive Meng Wanzhou at the Vancouver International Airport last December.  Losing out on access to China’s market for what had been Canada’s top export to the country has cost the Canadian canola industry about $500 million in the past six months.

“Canada has repeatedly attempted to obtain information from China regarding the scientific basis for its measures and on the process to restore full market access for Canadian canola seed,” the Canadian government said in a Sept. 9 filing to the WTO.

September 5, 2019
Roberto Chavez

Bank of Canada holds rates steady but flags global trade concerns.  The Bank of Canada kept its key interest rate unchanged at 1.75 per cent Wednesday, while warning that the U.S.-China trade conflict is having a more damaging impact on global growth than previously thought.

“As the US-China conflict has escalated, world trade has contracted and business investment has weakened,” the bank stated Wednesday in a news release. “This is weighing more heavily on global economic momentum than the bank had projected in [July].”

Domestically, the bank noted that Canada’s second-quarter growth was strong and exceeded the bank’s most recent forecast. Wednesday’s release pointed to stronger energy production and housing activity as contributing factors.

August 28, 2019
Roberto Chavez

Canada rejects calls to end trade talks despite Brazil's stand on Amazon.  International Trade Diversification Minister Jim Carr's office says Canada will continue its trade negotiations with Mercosur, the South American trading bloc that includes Brazil, despite demands to call a halt to the talks until more action is taken to protect the Amazon rainforest.

On Friday, NDP Leader Jagmeet Singh called on the Trudeau government to follow the lead of countries like France and Ireland, which are refusing to support the ratification of the European Union's trade agreement with Mercosur because of Brazil President Jair Bolsonaro's failure to respond to international concerns about the global environmental impact of deforestation.

Bolsonaro favours developing, not protecting, more of his country's forested land.  But so far, Canada isn't letting this issue stand in the way of its trade diversification goals.

In a statement to CBC News, the Minister's office said Canada's negotiations with Mercosur have made "good progress" since they were launched in March 2018. Ottawa hosted the most recent negotiating round, which concluded on August 2.  It is still "early in the negotiations," the statement said. Comprehensive trade talks regularly take years to conclude.

August 28, 2019
Roberto Chavez

Previous Interim CPC leader Rona Ambrose disagrees with CPC Leader Andrew Scheer’s assertion that Trudeau caved to Trump on NAFTA.Ms. Ambrose, who was interim Conservative leader after the party's 2015 election defeat, says Canada did make some concessions to get a deal but it also made some important gains.

In terms of its impact on the economy, she says the new North American Free Trade Agreement is pretty much "a wash" for both Canada and the United States while Mexico got hardest hit.  Ambrose was a member of a panel Prime Minister Justin Trudeau asked to provide advice and help create a united multi-party front during negotiations with the mercurial U.S. president, who repeatedly threatened to tear up NAFTA if a new deal favouring the U.S. could not be struck.

Andrew Scheer, who took over the Conservative helm from Ambrose in 2017, has called the new NAFTA a "historic humiliation" that exposes Trudeau's weakness on the world stage.  Former Conservative cabinet minister James Moore was also on the advisory panel but he's refusing to comment on Scheer's contention that Trudeau caved in to Trump.

August 20, 2019
Roberto Chavez

China’s move to stop buying several Canadian agricultural products has punished beef, pork, canola and soybeans farmers, and now industry leaders are worrying about the prospect of a broader threat — an eventual U.S.-China trade deal.

But a few Canadian crops have had stronger sales to China over the past year. The trade fight between the world’s two largest economies has, for example, helped contribute to a surge in Canadian wheat exports to China since Beijing imposed tariffs on American products. There are industry fears about what could come next — what will happen to Canadian farm exports if U.S. President Donald Trump and Chinese President Xi Jinping eventually strike a deal?

“If Trump forces China to buy a lot of American agri-food products, we won’t be selling Canadian agri-food products to China,” said Brian Innes, president of the Canadian Agri-food Trade Alliance. “Canada may benefit in the short term, but we’re going to get whiplash if Trump makes a deal with China.”

Innes said Trump has been clear that any trade agreement would feature major agricultural purchases by China from the U.S. At the moment, there are few signs of progress in U.S.-China negotiations. The trade war has grown increasingly bitter in recent months.

The two sides have hit each other with levies on hundreds of billions of dollars worth of goods. Last week, China announced it would stop buying American farm products in response to Trump’s threat of fresh tariffs on Chinese imports.  On Tuesday, however, the U.S. Trade Representative softened its position by announcing it would remove some Chinese products from a tariff list over “health, safety, national security and other factors.” Robert Lighthizer’s office also decided to delay the application of duties on certain products until Dec. 15, instead of the previous start date of Sept. 1.

Negotiators are expected to meet next month in Washington for another round of talks. Between January and June, federal numbers show Canada exported $335 million worth of wheat to China — an increase of more than 60 per cent compared to the same period in 2018.

August 9, 2019
Roberto Chavez

Minister Chrystia Freeland met with the United Kingdom’s Foreign Secretary Domminic Raab in his first stop visit to North America. Mr. Raab is on what The Guardian calls “a symbolically important trip to North America,” which peaks with important Washington meetings Wednesday. Mexico after that. Of course it’s symbolically important because Raab is the foreign secretary in a government that is determined to exit the European Union in 85 days. However, with an election looming in Canada and with all the oxygen being sucked by Brexit on the UK side, there was no talk on new trade terms post-Brexit.

Freeland mentioned that the two discussed: shared concern over the situation in Hong Kong, the crisis in Venezuela, the genocide of the Rohingya and Russia’s illegal invasion and annexation of Crimea, she also thanked the Foreign Secretary for the U.K.’s strong support of the two Canadian citizens arbitrarily detained in China.

August 9, 2019
Roberto Chavez

David MacNaughton, the U.S. ambassador who became the fulcrum of the federal Liberal government's strategy for managing relations with an impetuous and unpredictable White House, announced on August 8th that he plans to step down from the post at the end of the summer.

MacNaughton, who is vacating the job just weeks before Canadians go to the polls Oct. 21, said he intends to return to the private sector in Toronto. He'll be replaced on an acting basis by Kirsten Hillman, his deputy since 2017.

MacNaughton was a central player in the ensuing 13 months of talks to renegotiate the outdated trade pact, talks that culminated in a slightly retooled "new NAFTA" christened by Trump as the U.S.-Mexico-Canada Agreement. That deal has been approved in Mexico, but still awaits ratification in the U.S. Congress and on Parliament Hill.

August 7, 2019
Roberto Chavez

Ontario’s agriculture minister is calling for the federal government to offer compensation to meat producers who have been affected by the ongoing trade spat with China. In a letter to Agriculture Minister Marie-Claude Bibeau released on Tuesday, Ernie Hardeman says his office has been told that affected farmers are losing between $15-$30 per hog per week in revenues, because of China’s decision to block pork imports coming from Canada.

“Ontario strongly encourages the federal government to work with the meat sector to provide compensation to ensure they remain viable until predictable trade is restored and assist them in securing new export markets,” Hardeman wrote.

In what Canadian officials understand as retaliation for the arrest of Huawei executive Meng Wanzhou, China has suspended necessary import permits for Canadian canola — citing unsubstantiated pests complaints — and pork. China also suspended Canadian exports of meat in late June after the Canadian Food Inspection Agency discovered several dozen veterinary health certificates had been forged.

The Trudeau government has so far increased the maximum loan limit under the Advance Payments Program (APP) to $1 million, and for canola farmers, have made $500,000 interest-free.

Recent Related Articles
No items found.