Open Doors to a Canadian Progressive Trade Strategy
If Trade Minister François-Philippe Champagne makes New Year’s resolutions, he’s probably thinking work-wise of trying to find a new approach to implementing his progressive trade agenda. Decoupling this agenda from his trade negotiations strategy and focusing on other trading partners will open up new opportunities with better prospects for success.
Canada successfully negotiated a progressive trade agenda with the EU because the issues were already an integral part of Europe’s trade agenda. Some have even argued it was the Europeans who led the Canadians to adopt a progressive trade agenda, not the other way around. Either way, the door to progressive trade was open on both sides.
Canada was able to agree to a chapter on trade and gender in the modernization of its longstanding free trade agreement (FTA) with Chile because Chile had already previously agreed to such a chapter in its FTA with Uruguay. This door was also already open.
Success, however, is proving elusive in Canada’s trade negotiations strategy for NAFTA, the Trans-Pacific Partnership, and China.
The flaw in Canada’s progressive trade strategy in these three cases is not in its emphasis on labour and environmental standards, greater participation for all in the benefits of trade, and finding more and better jobs for everyone. Governments worldwide are concerned about these issues.
The problem is that trade agreements are not the best vehicle for quick wins on non-traditional trade issues. The problem is compounded when one side does not agree that such issues should be included in trade agreements. The strategy becomes unworkable when Canada is the demandeur and does not have the market power and political influence to convince the other side to address such issues in trade negotiations.
The following are three points to consider in a reboot of Canada’s progressive trade agenda.
First, repackage Canada’s trade negotiations strategy as part of a broader set of agreements that, together, form a progressive trade agenda. Environment Minister Catherine McKenna’s recent clean technology trade mission to China and related announcements have better prospects – and sooner – for increasing bilateral trade than an environmental chapter in an FTA that will take at least a decade to negotiate. Closer bilateral cooperation on air linkages to promote tourism and business – announced in China by Prime Minister Trudeau – is an efficient way to increase Canada’s services exports with China.
The cultural and educational exchanges that were also announced during the December trip will help change attitudes on both sides about each other. The announcement about cooperation on rule of law and labour, while modest, could also be considered a start toward a progressive trade agenda with China.
Second, focus the progressive trade agreement strategy on two partners: the Pacific Alliance (Mexico, Chile, Colombia, and Peru); and the United Kingdom. Canada already has labour and environmental agreements with all four Pacific Alliance (PA) members through existing FTAs with each of them. Canada and Chile have already agreed on a trade and gender chapter with Chile and is negotiating one with Mexico. Such a chapter will not be a stumbling block for discussions with Colombia and Peru. The PA negotiations have already started. On all other issues, including commercial issues, the doors are already open.
The UK is a trade agreement outlier right now, but it won’t be after March 2019 when the UK is scheduled to leave the European Union. Canada and UK negotiators are already discussing how to reframe the Canada-EU agreement into a bilateral agreement post-Brexit. Each side has reasons to conclude an agreement. They will find common ground on social issues to complement existing agreements on labour and the environment. Another opened door.
Finally, Canada does not necessarily need to use a trade agreement to achieve its progressive trade agenda. Having chapters such as on trade and gender in a trade agreement are useful if the goal is to have firm commitments with sanctions for noncompliance.
But that is not what Canada is negotiating. Its current trade and gender chapter model has no firm commitments except to elect a Chair for a working committee and to have one meeting. The chapter is also clear that there is no sanction for noncompliance.
The chapter is a cooperation agreement inside a trade agreement. If this is the goal, the strategy should shift to negotiating cooperation agreements. Fortunately, there are more potential partners for Canada for cooperation on progressive trade priorities than on launching trade negotiations. Finding those partners is a good next step.
There are lots of open doors for real progress on a progressive trade strategy that works for Canada and its trading partners. It’s time to walk through.