The federal government is pursuing a wrong-headed trade policy by not emphasizing expanding trade with the United States, argues a report from the conservative Fraser Institute.
The report, written by former Reform party leader Preston Manning and former Ontario Progressive Conservative premier Mike Harris, said that Canada already has gained most of what it can from world trade agreements, since there is little chance 150 countries can be convinced to endorse a radical trade liberalizing deal.
And most of the potential for one-on-one bilateral deals, such as current talks between Canada and South Korea, offer little return for the energy and attention they take.
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“Effective (trade) diversification will not be accomplished by pursuing free trade agreements with minor partners,” Manning and Harris argue.
“While such agreements do little harm, they also do little good. They represent the increasing fondness in official Ottawa for activity over results.”
The two influential former conservative leaders also argue that trade deals with minor players actually can get in the way of accomplishing their main recommendation that Canada integrate itself more completely into the American economy and take greater advantage of that rich market.
Different access deals with different countries complicates relations with the U.S., they write.
They argue Canada should keep its eye on the big trade prize, which is increased access into the American market.
“In short, it is a question of focus,” write Manning and Harris. “Canada’s government needs to guard against becoming captive to trade initiatives that bring us virtually no measurable benefit.”
While downplaying the likelihood of a World Trade Organization deal that would provide substantial new market access for Canadian exporters, they also bemoaned what they see as Canada’s diminished role as a key WTO player.
Canada plays “only a small role” in the current round of WTO negotiations, they wrote.
“Determined to protect a dwindling number of chicken and dairy farmers, our trade diplomats had little to contribute to the discussion.”
However, they said that does not diminish the importance of existing world trade agreements and the WTO for Canadian traders. It is simply that there are few prospects for significant new progress.
