Canada Should Pursue Sectoral Trade With China, Not Free Trade – Ed Greenspon

A new study says that the Canadian government should pursue sectoral trade agreements with China to avoid angering the u.

that advice is all the more timely because a new restriction in the u.

Mexico Canada free trade agreement just signed could effectively give a veto to us over Canada signing a free trade deal with a non market economy like.

China the study released today.

By the Public Policy Forum couldn’t come at.

A more opportune time as Canadians are pondering what we can do to diversify our trading relationships edward.

Greenspan is the president and CEO of the public policy forum and he joins me now welcome thanks for this is as I say this couldn’t be more timely this report take us through your main recommendation how is it you think that by pursuing sector by sector agreements we can avoid some of the pitfalls that we might face in a overall free trade well I know it’s self-serving but I want to agree with you on the timeliness of that and this is something we’ve.

Been working on for 18 months so it just didn’t come out of thin air and we’ve been working with a group on the question of you know how can China Canada best represents its interest visa vie China in a way that’s economically beneficial and politically.

Acceptable to Canadians so the the the recommendation around sector is we came to the conclusion months and months and months ago that rather than kind of running and perhaps tripping and it would be better to walk first and build off sectors and perhaps get to to an agreement over time there’ll be a full free-trade agreement the difference Martin is is.

This the provisions that you refer to in the new agreement with the United States and Mexico say that a free trade agreement in quotation marks would.

Be subject to review by the others now a free trade agreement generally means in WTO terms something that covers substantially all trade a sectoral agreement does not cover substantially at all trade it says ok we’re gonna trade and figure it some rules of the road and remove non-tariff barriers and other things here.

In in agri-food we’re gonna do this and in in in natural sources we’re going to do this in clean tech so we recommend a series.

Of these kinds of agree each of them with dispute settlement wreck mechanisms as well as other provisions in there and and we start with a series of things that aren’t going to trip over national security concerns okay examples so examples would be agri-food Natural Resources clean tech some of the ones I.
Gave engineering services education tourism areas of this sort also.

Also we’re paying real close attention to to the fact that China has this huge growing middle class and they’re they’re putting demands on China so.

To the summer had a consumer rebellion against poor quality infant vaccines in China so they care about high quality food high quality pharmaceuticals these points so then we happen a trip but you said it timeliness you know we tripped across a u.
MCA we didn’t know what was coming in the forum that it came certainly and.

And we realized that what we’re recommending you know it’s probably on side what the agreement says certainly it’s an on side the words of the agreement so that because that was what what I was gonna say obviously this would then have to go.

To trade lawyers but you’re saying that the the spirit of an agreement that prohibits or says there would be a review of a free trade agreement that applies to a whole of the economy free trade agreement or a good substantial part of the other were a lot of people call comprehensive free trade agreement so so the imperative is that we need.

To diversify as a country you know 75 percent of our trade is it’s the United States we’ve seen that that puts us at a weak.

Position visa be this kind of negotiation I think our negotiators probably did very well given the weakness with which which they’re working you know this world was conceived by us in some ways and that kind of heavy dependence on the.

US in a more more benign type of United States which is no longer benign towards Canada one thing that has come out though then so let’s say this would allow a sector-by-sector to escape that famous section 32 was now being.

Called the China Clause of the new u.

Read with great interest today a fellow named Alex Panetta who’s now writing for Politico and he’s he and some colleagues have dug up some.

Claw he says there’s at least six other clauses in the USMC a which if.

Not prohibiting Canada from having these kind of deals ask Canada to.

Mexico as well but ask Canada to basically be the policeman for American tariffs or American barriers to trade so do you think they’re still though might be if the protectionist winds in the United States continue there might be ways that they could still within the US MCA prevent Canada from opening up these kind of trade agreements with China I mean.

They they give the example Alex Panetta gives the example I think.

Of enforcing well we already have the example steel and aluminum where we are now basically being asked to make sure that Chinese steel is in trans ships through Canada but could that not be the accusations that we’re helping China dump in the United States and and I think it’s fair enough to say that Canada is not gonna be kind of a halfway house to do an end run on the on the United States and.

Its policies whatever you may think of those policies so III think that’s a fair enough demand a demand for information I mean country should share information about about their trading what’s a little bit more problematic.

Is when you seed you right to to legislate in your own country or to pursue Foreign Relations in the interests of your own country I.

Think that becomes a much more a much more difficult proposition I think that the sector by sector should be.

Able to stand up and it should also be able to stand up for this.

Reason Canada four point three percent of our trade basket goes to China the United States has twice as much trade proportion with China as we do eight point five percent of its trade basket goes to.

China so if you just moved up to the.

US standard let’s say we don’t go past that we go up to eight point five percent that adds twenty five.

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