Wouldn’t it be great to have free trade with China and the European Union?
Imagine if buyers from those huge markets and sellers of crops and meat from Canada could trade without worry of political interference or regulatory games. There’s no question that Canadian agricultural exports would surge.
But that sort of free-from-politics trade will likely never be a reality, as our experiences with the United States and Mexico within the North American Free Trade Agreement have shown. As we’ve learned, domestic politics in those countries can produce costly attacks on our exports, as with Country-of-Origin Labelling.
However, obtaining freer trade with China and the EU is probably our best hope for not only expanding into new markets, but also weakening the power of our current “free” trade partners, particularly the U.S., which is our dominant trade partner.
Being able to sell easily to a number of fickle, game-playing partners is better than being greatly dependent upon one, which is Canada’s position now.
Prime Minister Justin Trudeau has just returned from China, where he agreed to study the idea of forming a Canada-China free trade deal.
And the Canada-EU free trade deal is still alive, even though Great Britain’s vote to leave the EU makes the deal’s success much less likely than before.
It’s possible that a couple of years from now Canada will have added a binding free trade deal with the EU and be steaming down the river toward one with China.
We’ll never be able to trust the Europeans and Chinese. Let’s not fool ourselves about that. They are some of the world’s most accomplished and ruthless game players when it comes to trade. We have seen that play out with flax, meat and canola.
While countries like the U.S., the United Kingdom, Australia and New Zealand at least seem to believe in free trade, the continental Europeans and Chinese are far less idealistic about it. With them, civilized horse-trading is about the best we can hope for.
That’s what we’re getting with the Canada-EU deal, if it is ever passed. Exports of beef and pork would still be capped and other restrictions also apply.
As well, their cheese exports to Canada would be capped.
In many areas, there would simply be a broader range of goods we could trade with relative freedom, rather than trying to create a truly free trade zone with the EU.
But trade deals also provide mechanisms to minimize the chances that cynical politicians can manipulate technical matters to interrupt trade.
That’s probably the best we can hope for with China.
Our government might be able to find ways to exempt some products and commodities from unilateral regulatory interference, and that would be a good thing.
Don’t expect “free” trade with China. That will probably never happen and no one expects it.
But getting “freer” trade and “more freely” trading with the giant market would be a great development.
Now, Canada relies too much on the U.S. market, which is dangerous because of the cynical games American politicians can play with imports from Canada regardless of our free trade deal.
Europeans and Chinese won’t be any less inclined to play such games even if we ink deals, but being able to shift between three fickle pseudo-free-trade zones would be better than being too reliant upon one.
“Freer” and “more freely” aren’t as good as “free,” but they are a lot better than what we have today.