A leading Canadian economist believes the two front-runners to become the next president of the United States will soften their stance on the Trans-Pacific Partnership agreement once they are in the oval office.
Both Hillary Clinton and Donald Trump have publicly stated they are opposed to the free trade deal encompassing 12 Pacific Rim countries including Canada.
Members of the TPP finalized an agreement last year but it hasn’t been ratified or implemented.
Clinton was initially in favour of the agreement but changed her tune during her campaign to win the Democratic nomination.
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“I waited until it had actually been negotiated because I did want to give the benefit of the doubt to the (Obama) administration,” she said during one of the debates.
“Once I saw what the outcome was, I opposed it.”
Trump has been against the pact from the get-go.
“It’s a horrible trade agreement,” he said at a recent rally during his campaign to become the Republican nominee.
“You have 12 countries, all of whom want to rip our heart out.”
Peter Hall, chief economist with Export Development Canada, said the anti-globalization rhetoric surfacing on the campaign trail makes his blood boil.
He finds it unbelievable that the leaders of an economy that has benefitted the most from globalization and free trade are talking the way they are.
U.S. multinationals have fanned out across the world and defined what international supply chains look like, yet politicians are talking about building walls around the U.S. economy.
“The message is catering to a group of people who have been left out of the economy, not because of globalization but because of the uniqueness of this business cycle,” said Hall.
He said the last growth cycle lasted 16 years, twice as long as usual, due to globalization.
There is usually a head of steam that builds up at the end of any growth cycle and then the bubble bursts. In this case the head of steam was more intense because of the length of the growth cycle and when it burst in 2008 it was catastrophic.
“We had the mother of all recessions happen. It was deep and almost brought our financial sector to its knees,” Hall told business people attending a Saskatchewan Trade and Export Partnership luncheon.
He said the anti-globalization message plays well with people who were left behind during the recovery phase when the U.S. economy was stagnant.
Politicians are sending the wrong message with talk of erecting walls, said Hall. Instead, they should be delivering a message of hope because the U.S. economy has mopped up the excesses of 16 years of growth and there is pent-up consumer demand that is lifting the economy out of the doldrums.
Hall believes Trump or Clinton will change their tune on the TPP agreement and globalization once they come to power .
“The rhetoric of a political election (will) give way to the reason of the way the economy works.”
