Bulk Drug Sales to the USA

Canada must resist the lure of bulk U.S. drug purchases

 

‘Beware of Greeks bearing gifts” is advice that Canadians should heed on U.S. legislation permitting the bulk purchase of pharmaceutical drugs from Canada for the U.S. market.

At a time when we are about to renegotiate our preferred access for people, goods and services, it makes no sense for Canada to involve itself in this very American controversy.

Vermont Senator Bernie Sanders is the driving force behind a bill in the U.S. Senate aimed to give Americans “Canadian” prices for their prescription drugs. A similar bill was defeated in January (52-46) but not on the usual Democrat versus Republican partisan lines. A dozen Republicans, including senators Ted Cruz, Chuck Grassley and John McCain, voted for the measure.

Americans spend more per capita on health care than anyone else in the world – $9,451 (U.S.), according to the OECD (the comparable figure for Canada is $4,727). Donald Trump and the Republicans were elected, in part, on their promise to abolish Obamacare, and their recent spectacular failure in the House of Representatives only underlines the challenges around U.S. health care.

Groups of American seniors crossing the border to buy drugs or having prescriptions filled in Canada and then sent to them in the United States – this also accommodates Canadian snowbirds – has long been a feature of cross-border “trade.” This will continue. But Canada is not the solution to the United States’ drug-pricing controversy.

Our pharmaceutical industry – innovators and the generics – is stretched providing for the Canadian market. Last year, Health Canada introduced regulations requiring drug manufacturers to report on anticipated and actual drug shortages. There is even a website – Drug Shortages Canada.

Involving ourselves in this American problem would not serve Canadian interests. Given that many of the prescription drugs that Canadians consume are manufactured elsewhere, Canada would simply be a trans-shipment point.

The failure of Canadian authorities to inspect for counterfeits in goods trans-shipped through Canadian ports is a continuing irritant to the United States. With the opioid epidemic in the United States (a problem also in Canada), there is also concern that Canada would become a back door for international drug smugglers. The bulk transfer of pharmaceutical drugs makes no sense. As with the prohibition on the bulk transfer of our water, Parliament and provincial legislatures should act now to prevent wholesalers from exporting drugs in bulk from Canada.

With aging populations in both Canada and the United States, there is only going to be more demand for drugs and biologics that improve and sustain life. This is where Canada and the United States should be co-operating.

It is estimated that, with research, clinical trials and licensing by governments, it takes eight to 11 years and costs almost $3-billion to bring a drug to market. The creators, mostly private companies, deserve a fair return on their investment but pricing must be fair as consumers and their legislators will intervene, as illustrated by the EpiPen controversy.

Innovation is a Trudeau government priority. Innovative Medicines Canada says that there are more than 500 new products in development supported by more than $1-billion in annual research and development. Genome Canada and its provincial partners are making a difference employing using new approaches, such as Open Science, involving the sharing of data and samples.

If health care in the United States is the most expensive in the world, Canada’s is also costly – about 11 per cent of our GDP. Every provincial government is engaged in efforts to bring down health care, which absorbs about 40 per cent of their budgets. More attention needs to be devoted to outcomes. This will require hospitals and health-care professionals to share data and then crunch them so we can see what is working and what can be improved. This is another area where co-operation with the United States makes sense.

In the meantime, let’s not risk our reputation and our own supply to address a “Made in America” problem that must be fixed in America. Mr. Sanders’s “Trojan horse” should be emphatically rejected and the sooner the better. Canada has much bigger stakes in play with our American neighbours.

A former diplomat, Colin Robertson is vice-president and fellow at the Canadian Global Affairs Institute.

 

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Canada and Mexico

If Canadians are wary about the incoming Donald Trump administration, think about the Mexicans. For them, Mr. Trump presents a clear and present danger.

His threats have moved beyond promises to deport “two … it could even be three million” and to build a “Great Wall” across the entire land border that “will be paid back by Mexico.”

Threatening to impose a 35-per-cent border tax, president-elect Trump has cajoled American, Japanese and German companies to abandon their investment plans in Mexico. The peso has plummeted to its lowest levels ever against the U.S. dollar.

To prepare for a President Trump, President Enrique Pena Nieto recently appointed a new Foreign Minister, Luis Videgaray, and yet another new ambassador to the U.S. (the third in nine months). In speeches to Mexico’s diplomatic corps last week, both Mr. Nieto and Mr. Videgary said that in any negotiations with the U.S., the entire bilateral relationship would be on the table, and that Mexico will not pay for the wall.

For Canadians to feel smug or secure would be a mistake. We may not yet be a direct target, but we are within Mr. Trump’s range of vision.

Inevitably, we would become collateral damage, especially when it comes to protectionist border measures. A survey last month of Trump supporters revealed that 73 per cent expect either a better deal or withdrawal from NAFTA within the first 100 days of the Trump presidency.

Mr. Trump promises more enforcement capacity to secure U.S. borders and, at last week’s Senate Homeland Security confirmation hearing for secretary-designate Gen. John Kelly, both Democrats and Republicans told him not to ignore the northern border and pressed for more security. Eight of its 15 members come from northern border states.

Nor would Canada be exempt from any new border tax, said Mr. Trump’s press secretary last week. The National Bank of Canada has estimated a 10-per-cent border levy would cause Canadian exports to slump 9 per cent within a year.

Canada and Mexico need to make common cause in the face of Trumpian excess. A visit to Mexico, before the summer, by Prime Minister Justin Trudeau would visibly underline our enduring partnership at a time when Mexicans are feeling vulnerable and alone.

While our borders are different and our responses will reflect our particular circumstances, we need to stay close, especially in any NAFTA discussion with Washington.

An active advocacy campaign – a joint effort led by our consuls, suppliers and their customers – needs to inform Americans, especially those living in the 31 states won by Mr. Trump, that their first or second markets are either Canada or Mexico.

Studies conducted for the Canadian Embassy and by the Wilson Center estimate that our commerce accounts for over 14 million American jobs. Underlining our integrated continental market is the fact that 40 per cent of the finished goods that Americans buy from Mexico, and 20 per cent of what they buy from Canada, is “made in the U.S.A.”

Linda Hasenfratz, CEO of Linamar, got it right when she warned there is “too much emotion and not enough fact” out there. Ms. Hasenfratz, who also chairs the Business Council of Canada, argues that adding cost and inefficiency would undercut our global competitiveness. The ultimate cost will be borne by the consumer.

We should look at expanding Canada-Mexico trade in produce – their tomatoes and vegetables for our beef and pork. There are major Canadian investments in Mexico – producing trains, planes and automobiles – as well as banking and mining operations. We need an active investment outreach to encourage Mexican firms to follow the lead of Grupo Bimbo, the world’s leading baker, that owns Canada Bread.

Then there are the people-to-people ties. With the visa lifted we can and need to encourage more Mexican tourism and study in Canada.

Any renegotiation of NAFTA should begin with including the improvements already negotiated through the Trans Pacific Partnership (TPP): preclearance of goods; increasing the number of professionals eligible for fast-track passage and temporary employment; and a trilateral approach to new infrastructure to enhance North American competitiveness.

If Mr. Trump repudiates NAFTA then we should keep it (U.S. withdrawal does not kill NAFTA like it does the TPP) and look for prospective new partners, including Britain, the Pacific Alliance (that includes Chile, Colombia and Peru) and to new partners across the Pacific.

Canada may not be in the crosshairs in the same fashion as Mexico but we have no immunity from Trumpian threats. Canada and Mexico need to hang together or, surely, we will hang separately.

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Internet Governance

The time is now to forge Internet governance

Last year’s economic contribution of the Internet was estimated at $4.2-trillion (U.S.). If the Internet were a national economy, it would be G5. By 2025, management consulting firm McKinsey & Co. estimates that the Internet of Things will generate upward of $11-trillion in efficiency gains and economic growth.

But the dark side, the cost of cybercrime – notably fraud and data theft – was estimated to be as high as $445-billion in 2016. And governments continue to censor and crack down on social media apps to curb dissent.

In its latest annual review, Freedom House, a U.S.-government-funded NGO based in Washington, named Estonia, Iceland and Canada as the top “free nations,” but it reported that Internet freedom declined in 2016 for a sixth consecutive year.

China was identified as the “worst abuser” of Internet freedom because of its “information security” policy and its crackdown on free expression. Brazil dropped from “free to partly free,” while Turkey dropped into “not free” because of its blocking of social-media platforms.

We need some ground rules on Internet use.

Last June, the Global Commission on Internet Governance concluded two years of deliberation. Its report, One Internet, should be the starting point for informed action.

An initiative of Britain’s Chatham House and Canada’s Centre for International Governance Innovation (CIGI) think tanks, the commission was chaired by former Swedish prime minister Carl Bildt, with significant Canadian participation from co-chair Gordon Smith, co-director Fen Osler Hampson – both distinguished fellows at CIGI – and McKinsey CEO Dominic Barton, who now chairs Ottawa’s advisory panel on economic growth.

The report maps the complex landscape of Internet governance, with its distributed institutions and procedures. The Internet has succeeded, it argues, because it is a network of interoperating networks and was constructed using carrots, not sticks. But national rules are increasingly having global effects – and the trends, Freedom House reports, are cause for corrective action.

One Internet argues for an open Internet system that allows data to flow freely based on efficiency, non-discrimination and freedom of expression. It makes a series of practical recommendations designed to ensure an Internet that is open, secure, trustworthy and inclusive, including:

  • Regular reports by Internet companies naming the governments that block access and listing what they are blocking.
  • Government agreements on targets that are off limits to cyberattack, with a mutual-assistance pact to deter cyberintruders.
  • Public education on cyberhygiene while ensuring broad public access to the Internet.
  • Standards on data protection, privacy and the use of algorithms.
  • Incentives to encourage competition to make the Internet and its devices accessible to all.

Given the experience of Russian hacking in the recent US election and the elections later this year in France, Germany, Netherlands and elsewhere there should also be a prohibition on cyber-interference in the democratic process

The commission argues that any oversight regime (or regimes) must be adaptable and resilient.

In terms of regulatory models, the International Telecommunication Union (ITU) is perhaps the closest in function, but for effective private-sector participation, designers should also look to the Montreal-based International Air Transport Association (IATA). It provides global governance and standards for airline safety, security, efficiency and sustainability.

Championing Internet governance is an initiative the Trudeau government could usefully incorporate into its multilateralist agenda. The Internet and digital literacy should be a key component in the government’s new development plan. More than 60 per cent of the world remains offline, and the disconnected are disproportionately rural, illiterate and female. In our increasingly digital world, we need to develop a new social contract, one that works to narrow the divide between digital haves and have-nots.

The Internet has created a global commons for commerce and discussion that continues to expand. At its best it accelerates the exposure of corruption and enables research leading to scientific discoveries and medical cures that benefit humanity.

At its intolerant worst, the Internet is a vehicle for fake news, trolling, bullying, anti-Semitism, homophobia, racism and xenophobia.

For the gullible, the Internet encourages the spread of conspiracy theories and breeds suspicion of elites and the establishment. Facts have become fungible in an emerging post-truth, alternative universe of multiple media. This contributes to the Berlusconization of politics: the rise of clownish leaders who say ridiculous things and then laugh them off.

We need standards and norms of Internet behaviour. An international convention on Internet governance would be a useful step forward.

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Aleppo, R2P and Human Security

In the wake of Aleppo, instead of writing the eulogy for R2P – the Responsibility to Protect commitment endorsed by all member states of the United Nations in 2005 – liberal internationalists should seize it as a call to action.

Canada can help. It is time to resuscitate the human-security agenda as a major foreign-policy initiative that would also provide a meaningful Canadian platform in our bid for a Security Council seat in 2020.

In many ways, R2P was a Canadian initiative, the capstone to the Chretien Government’s human-security agenda. Michael Ignatieff was one of R2P’s intellectual godfathers. Ambassador Allan Rock led the successful campaign that led to the UN adoption of R2P at its World Summit in 2005, where members endorsed the protection of populations. R2P meant “never again” to genocide, ethnic cleansing, war crimes and crimes against humanity.

R2P nicely complemented the other major achievements of the human-security agenda: the Land Mines Treaty (1997), the creation of the International Criminal Court (2002) and a continuing succession of UN resolutions condemning the recruitment of child soldiers and use of small arms.

Today, the accomplishments of the human-security agenda are under threat. During his recent visit to Ottawa, U.S. Vice-President Joe Biden encouraged Prime Minister Justin Trudeau to champion the liberal international order.

It will be a tall order, especially for a leader who has a big domestic agenda to fulfill and who has already carved out an international leadership role on climate change – a bigger challenge given the change in attitude of the next U.S. administration.

Michael Small, who directed the human-security agenda within Canada’s Foreign Affairs Department, has set forth three lessons from that initiative that the new government could usefully heed.

First is to find a champion within cabinet.

As foreign affairs Minister, Lloyd Axworthy diligently worked the international circuit to build a coalition of support beginning with his North American counterparts, U.S. secretary of state Madeleine Albright and Mexican foreign minister Rosario Green.

Second is to respond to pressing security needs.

At that time, it was the surge in intra-state conflicts, but today it would also include terrorism, the rise in authoritarianism and declining confidence in rules-based international institutions.

Third is to develop new ideas and build intellectual capital.

The government invested in research at universities, think tanks and non-governmental organizations and encouraged junior officers in Canada’s Foreign Affairs Department to think creatively. That resulted in Canada creating the International Commission on Intervention and State Sovereignty, in which Mr. Ignatieff played a lead role along with Australian Gareth Evans and Algerian Mohamed Sahnoun.

In a retrospective look at R2P, Mr. Ignatieff argues that governments must underline to their citizens that protecting civilians is “about preventing harm, not primarily using force.” Avoiding mission creep, he argues, is vital.

All of these lessons will need to be applied if Mr. Trudeau to deliver on his promise to the UN that Canada is “here to help.” Mr. Small also suggests that the Trudeau government could update the human-security agenda with the inclusion of three issues in which it already has a track record: refugee protection, pluralism as an instrument for dealing with conflict reduction and social inclusion, and empowering women.

Building all-party support will be important. The Harper government forcefully promoted maternal and child-health initiatives as well as “girls not brides,” and this work should continue.

Revitalizing R2P will not be easy.

The first test for Mr. Trudeau will be convincing U.S. president-elect Donald Trump to engage. The United States is the guardian of the liberal international order and its deterrent muscle is indispensable.

The tragedy in Aleppo, described by a UN spokesman as a “complete meltdown of humanity,” represents a failure at many levels – national, regional and international. The international humanitarian norms that underwrite human security are eroding, if not collapsing. The secondary effects – a deluge of refugees and terrorism – have contributed to the rise of populism and right-wing movements across the West.

Former UN secretary general Kofi Annan once asked: “If humanitarian intervention is, indeed, an unacceptable assault on sovereignty, how should we respond to a Rwanda, to a Srebrenica – to gross and systematic violations of human rights that affect every precept of our common humanity?”

The “shift in the angle of vision” – from that of the state to that of the well-being of its citizens – that inspired R2P and the human-security agenda has lost none of its relevance.

The international community came together after the tragedies in Rwanda (1994), Srebenica (1995) and Darfur (2003). Aleppo reminds us that R2P and the cause of human security needs fresh thinking and new champions.

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NAFTA , Trump and Trade

Trump wants to overhaul NAFTA? Bring it on

Colin Robertson

The Globe and Mail Wednesday, Dec. 07, 2016

President-elect Trump wants to “renegotiate” NAFTA. Bring it on.

The gains we made from NAFTA (1993), spectacular during its first decade, have mostly plateaued. The Trans Pacific Partnership agreement would have updated our continental accord but now that Mr. Trump has shelved it, re-opening NAFTA makes sense.

For Canada, a North American economic pact is vital. The U.S., our biggest trading partner since the Second World War, currently accounts for about 75 per cent of our trade. Our trade with Mexico has grown sixfold since NAFTA.

For Canada, our main objective in re-opening NAFTA should be the freer movement of people, goods and investment within North America. Last year more than $700-billion in goods flowed across our southern frontier and more than 150 million people crossed our shared border by land, air and water.

As with any negotiation, to get we have to be prepared to give. Let’s be bold. Let’s put our costly dairy supply-management, a perennial U.S. target, on the table in return for better procurement access, including shipbuilding.

Last week’s Auditor General’s report on the Beyond-the-Border Action Plan – the latest in a series of initiatives aimed at improving border access – identified shortcomings that should be Canadian priorities with U.S. negotiators. The Entry/Exit and trusted traveller programs, including customs self-assessment and the Single Window initiative, are all behind schedule. Some of this is our responsibility but we also need to see more openness to change from the U.S.

Despite recent efforts at regulatory reform, our supply chains still suffer from the “tyranny of small differences.” Regulatory reform could benefit from a Trump re-boot.

The provinces, who were not in the room for the NAFTA negotiation, should be full partners in the coming sessions because many of the necessary improvements fall under their jurisdiction. The premiers should reach out to their governor counterparts with specific proposals around reciprocity for procurement, especially given Mr. Trump’s promised “Big Build” program.

The North American advantage is our people and a new trade accord should include:

  • Bringing the list of professions eligible for fast-track cross-border access into the digital age. The skilled trades workers who are enabling North American energy independence also need to move back and forth with ease.
  • Speeding up the re-qualification system for professionals needed on the job now.

Mr. Trump wants a better deal for American workers.

Main Street America never appreciated the value of NAFTA in part because U.S. leaders did a lousy job in explaining – and sharing – the value of continental trade while failing to adequately help those left behind through global competition and technological changes.

We did it better in Canada but an overhaul of the NAFTA accord on Labour Cooperation is in the interests of all three countries. Why not make a joint commitment to adjustment assistance and retraining as a basic right for workers?

Mr. Trump’s promise to build a wall and to increase deportations to Mexico has led some to wonder whether we’d be better to go it alone with the U.S. leaving Mexico to fend for itself. Divide and conquer is integral to Mr. Trump’s Art of the Deal. Working with Mexico will avoid that trap.

Mexico is now our third largest trading partner. We have major investments in Mexico and, with a middle class of 44 million people, Mexico is a market that will only increase. By 2050, Mexico is expected to rank fifth in global economic weight.

Mr. Trump wants another look at country-of-origin-labelling (COOL), a protectionist measure that curtailed our meat exports. Working closely with Mexico, our joint efforts resulted in Congress repealing COOL last December.

On COOL and those many issues where Canada and Mexico share common cause – including trade, climate and energy – we need to continue working together. On the border and security, we will diverge at times, reflecting our own interests but we should work in tandem. Our shared and overriding principle with Mexico should be no surprises and constant communication at all levels.

Re-opening a deal that is past its best-before date is an opportunity that all three nations should embrace. It’s time to bring NAFTA into the digital age.

A former diplomat, Colin Robertson is vice-president and fellow at the Canadian Global Affairs Institute.

NEW PODCAST: ‘THE GLOBAL EXCHANGE’
NAFTA and Trump: a Discussion on the Future of Trade

On today’s ‘Global Exchange‘ Podcast, we invited two experts on trade to discuss the implications of a Trump Presidency for NAFTA, TPP, and the status-quo trade regime as it stands today. Join Colin, John Weekes, and Rob Wright as they probe the future of trade in an era of rising populism and protectionism.

Bios:

  • Colin Robertson (host) A former Canadian diplomat, Colin Robertson is Vice President of the Canadian Global Affairs Institute and a Senior Advisor to Dentons LLP.
  • Rob Wright – Rob Wright served as Canadian Ambassador to China from 2005-2009, and as Ambassador to Japan from 2001-2005. From 1995-2001 he was the Canadian Deputy Minister for International Trade.
  • John Weekes – Canada’s ambassador to the WTO from 1995-99 and a chief negotiator of the NAFTA trade agreement.


Related Links:

 

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Trade Commissioner Service and Promoting Canadian Trade

With CETA and TPP in limbo, here’s how Canada can give trade a practical boost

With our big trade-policy initiatives – the Canada-EU trade deal and the Trans-Pacific Partnership – in limbo, Canada’s leaders need to turn their attention to trade promotion.

Canada lives by trade. It represents 60 per cent of our GDP. One in five jobs is linked to trade. There are more than a million small- and medium-sized enterprises operating in Canada. A 2013 survey concluded that only 41,000 were exporting. We can do better.

We need a trade strategy that has the support of the provinces and regional leadership. International Trade Minister Chrystia Freeland should turn her considerable skills to achieving consensus on a new trade plan and then deliver it through a re-energized Trade Commissioner Service.

The Harper government’s Global Markets Action Plan is a good starting point. It established priority markets that also integrated the services of Export Development Canada, Canadian Commercial Corporation and the BDC.

Ms. Freeland needs to achieve buy-in from the provinces and our cities. Since the successful implementation of the Canada-U.S. free-trade agreement (1988), our premiers and civic leaders, regardless of political stripe, are among the strongest advocates of expanding our global customer base and attracting foreign investment.

Saskatchewan’s Trade and Export Partnership (STEP) just celebrated its 20th anniversary. It works because it aligns government resources with exporter needs. Recognizing that city regions are the hubs for innovation and home to our service industries, the 11-city Consider Canada alliance has launched a series of initiatives to attract foreign investment and talent.

Ms. Freeland should revalidate the Action Plan’s target markets. But the focus of the Plan should be on identifying customers, investors and technology partners. A revised strategy also needs to address:

  • International investment by Canadian firms, a necessary part of competing globally, including the role of pension funds;
  • Canadian business participation in development bank projects, especially infrastructure;
  • Foreign direct investment in Canada including state-owned enterprises and public-private partnerships;
  • Internationalization of start-ups through reciprocal soft-landing arrangements in incubators and accelerators in the United States and abroad;
  • Scaling-up Canadian companies lacking sales and marketing experience;
  • Identifying opportunities for Canadian cybertools, technologies and services, especially in emerging markets;
  • Utilization of the Canadian diaspora and the family ties created by immigration to advance trade and investment;
  • Integrating international education, immigration and tourism into our strategy.

The ultimate test of our trade agreements is their ability to generate new business for Canada. Ms. Freeland should produce an annual report card on progress in expanding our customer base.

To give the new plan a boost, Prime Minister Justin Trudeau should draw from the Jean Chrétien playbook and resurrect the Team Canada missions that included premiers and mayors, business leaders and university presidents. These initiatives help sell Canadian goods and services and create a sense of common purpose among our leaders.

Canada’s Trade Commissioner Service is our sales force but it needs re-energizing.

Trade commissioners are door-openers, matchmakers and a source of market intelligence for Canadian business. When local governments are not living up to their investment and trade obligations, the trade commissioners are our front-line advocates to achieve compliance. Trade commissioners find paths through the challenges of foreign languages, customs and regulatory thickets.

Every dollar spent by the Trade Commissioner Service generates $27 in increased exports. Firms that access its services export 18 per cent more than those who don’t.

Our trade commissioners would benefit from more specialized training, including assignments with Canadian business. They also need the right tools. Budget-paring obliged, for example, dropping memberships in American and European chambers of commerce, a small investment that gave them wider networks and market intelligence.

The reality of global competition is that government assistance in competing in global markets benefits Canadian business and our economy.

Canadian business is successfully integrated into the North American markets that account for nearly 80 per cent of our trade. Increasingly, it is earning its place in global supply chains, especially in the transportation and communications sectors.

Canadian agricultural products and foods harvested from our land and seas have earned a reputation for quality. Canadian services in banking, insurance and engineering are efficient and trusted. We are global leaders in medical and energy innovation and digital technology.

A good trade plan will set the compass for expanding our reach into global markets. But success – measured in contracts, investment and talent – requires sustained advocacy and marketing. The necessary first step is revitalizing Canada’s Trade Commissioner Service.

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Softwood Lumber and Canada US trade

 

Canada must be careful not to become the U.S.’s trade target

Colin Robertson The Globe and Mail   Wednesday, Sep. 28, 2016

There are bumpy times ahead for global trade and especially for trade with the United States, our biggest trading partner. Canadian governments will have to be nimble lest we get sideswiped or become a target, as is already the case on softwood lumber.

On Tuesday, the World Trade Organization announced that the pace of global trade has slowed to recession levels and it warned of creeping protectionism. Anti-trade rhetoric is a central feature of this presidential cycle, breaking an 80-year consensus within the U.S. that supported open trade and the liberal rules-based international order.

In Monday’s debate Donald Trump again bluntly declared that the U.S. has to renegotiate its trade deals “to stop” countries, specifically naming Mexico and China, from “stealing our companies and our jobs.” A more nuanced Hillary Clinton repeated that she could not endorse the current Trans Pacific Partnership (TPP). Ms. Clinton has promised to name a chief trade prosecutor but in the debate she acknowledged that the U.S. has “5 per cent of the world’s population. We have to trade with the other 95 per cent.”

The most potent threat to Canada would be Donald Trump’s promise to renegotiate the North American Free Trade Agreement. In a report last week the Washington-based Peterson Institute concluded that there is “ample precedent and scope” for a U.S. president to unilaterally raise tariffs and that blocking efforts through the courts or Congress would be “difficult and time-consuming.” Trade expert Gary Hufbauer warned that “enormous economic damage will ensue.”

Meanwhile the clock is ticking on softwood lumber, the Freddy Krueger of trade disputes. Settlement in 2006 depended on the personal intervention of President George W. Bush, tired of having it as a drag on his discussions with Prime Minister Paul Martin and then Prime Minister Stephen Harper.

The 2006 agreement ran out last year and the cooling-off period concludes on October 12. Despite discussions between President Barack Obama and Prime Minister Justin Trudeau and the ongoing efforts of Trade Minister Chrystia Freeland and the United States Trade Representative Michael Froman, the U.S. industry soon will be seeking countervail duties on our lumber exports.

A resolution anytime soon is doubtful. With less than four months left in office, President Obama will spend his remaining political capital trying pass the TPP during the congressional lame-duck session following the November 8 election.

A congressional deal on TPP would likely oblige reopening the agreement. In the ensuing scramble, Canada’s supply management system for dairy products could potentially come into play. The Trudeau government should look at this as an opportunity to reform an inefficient system that costs Canadian consumers.

For now, Canadian negotiators need to understand the political geography around lumber (or timber as it is called in the U.S.) and reconcile the differences within Canada. The Maritimes, where most of the harvested land is in private hands, want a continued exemption from any managed trade deal. Quebec and Ontario have a distinct position. So does Alberta.

There are the differences between coastal and interior British Columbia, our largest lumber exporter. British Columbia’s protectionist policy on the export of logs needs reform. It not only incites U.S. trade action but it is a handicap in efforts to negotiate an economic partnership agreement with Japan.

Despite some initial wobbling, the Trudeau government is demonstrating a similar enthusiasm for freer trade as previous governments.

Ms. Freeland is an effective trade minister, especially in working the political relationships. Ms. Freeland’s personal efforts with U.S. Senate agriculture chair Pat Roberts, a conservative Republican, helped resolve the nearly decade-long country-of-origin dispute.

Earlier this month Ms. Freeland travelled to Germany to help secure the support of the Social Democratic Party for the Canada-Europe trade agreement (CETA). She named former trade and foreign minister Pierre Pettigrew to be our political point person for CETA. The deal is on track for signature in late October, with implementation of much of the agreement in 2017.

Meanwhile, the government’s cross-Canada TPP consultations have become a public education exercise around the importance and value of trade.

In recent years, western governments have gotten out of the habit of reminding their citizens why freer trade matters to their personal livelihood and to national prosperity. Trade is now very much about the politics of inclusion. The current U.S. presidential campaign and the recent Brexit vote are reminders that governments forget this lesson at their peril.

More Related to this Story

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Colin Robertson Why it’s so important for Trudeau to fix the Canada-U.S. border

At G20, Trudeau must reflect on tenure and plot inclusive economic course forward

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Canada at the G20 in Hangzhou, China

 

At G20, Trudeau must reflect on tenure and plot inclusive economic course forward

Colin Robertson The Globe and Mail Friday, Sep. 02, 2016

No longer the debutante, Prime Minister Justin Trudeau travels to Hangzhou, China, to attend his second G20 summit (Sept. 4-5). For Mr. Trudeau it’s an opportunity to strengthen personal relationships and to share perspectives with fellow leaders on a global economy that is anemic and an international landscape that is increasingly disoriented.

In his initial summiteering, hopscotching from Commonwealth to climate, from G20 to APEC and later at Davos, Mr. Trudeau’s message was that “Canada is back.”

Subsequent actions are defining its form: more emphasis on humanitarian relief for victims of the ISIS conflict, while still supporting military efforts to bring it to an end; resettlement of Syrian refugees; a Canadian brigade for Latvia to support NATO’s collective security; a robust peace operations commitment; measurable action on climate-change mitigation; and restarts in out relations, first with the U.S., and now China.

At a time of of popular discontent with leaders and government, Mr. Trudeau is an anomaly. He is more popular today than on his election and his government is getting some difficult things done. G20 leaders will be interested in the Trudeau method. They will also want his take on the U.S. election.

As he reflects on his first year as Prime Minister, Mr. Trudeau could make the following observations:

First, there is no magic bullet on economic growth. It takes a lot longer to put stimulus policies into effect, especially when implementation is shared with different levels of government. Well-meant but time-consuming permitting obligations means getting things done in a four-year mandate is very difficult. What is the balance between action on nation-building projects and consultation around social license?

Second, focus on outcomes, recognizing that one size does not fit all. Canada’s provinces were already far ahead in the practical implementation of carbon pricing. But just as their regional energy mix is different – oil and gas, nuclear and hydro-power – so too are their mitigation policies, such as a carbon tax, carbon levy, cap-in-trade.

Third, using social media is essential if democratic leaders and their governments are to sustain public support. A picture and a tweet are more effective in delivering a message than a thousand press releases.

Canadians are assumed to understand Americans better than anyone else, and this interpretive capacity gives Canadian leaders a diplomatic advantage, especially in multilateral forum like the G20. Given his “bromance“ with President Barack Obama, fellow G20 leaders will want Mr. Trudeau’s insights into the post-Obama U.S.

If Mr. Trudeau is shrewd, he should reach out to Mexican President Enrique Pena Nieto – who has just met with Donald Trump. Developing a joint approach in their diagnosis, and the opportunities and challenges of the next U.S. Administration and Congress, would serve both countries’ interests. While neither Canada nor Mexico may be the immediate target of U.S. trade action, they will certainly be collateral damage should the U.S. succumb to the protectionist impulse.

For now, developing a united front with the other G20 leaders in support of freer trade and open markets will encourage like-minded allies within the U.S.

Canada also needs to look at other options, especially if the U.S. rejects the Trans-Pacific Partnership.

Should, for example, Canada and Mexico seek admission to the China-inspired Regional Comprehensive Economic Partnership that also includes Japan, South Korea, Australia, New Zealand, India and the 10 countries of the Association of Southeast Asian Nations?

Even though it lacks the democratic cohesion of the G7, the G20 is the global economic leadership forum. It was the brainchild of former finance minister Paul Martin, who recognized that the G7 lacked sufficient inclusiveness to address globalization. Elevated to the level of leaders in 2008, the G20 helped mitigate the Great Recession and prevent it from becoming a second Great Depression. One aim of the Hangzhou summit is to help integrate recent climate and sustainable-development goals in global economic governance.

Cynics who doubt the utility of the G20 need to appreciate that the process is more important than the communiqué. The summit sits atop a year-long series of meetings of ministers and central bankers, and formal consultations with business, think tanks, labour, youth, women and civil society.

Complicated, time-consuming and often without an obvious outcome, the G20 in some ways resembles a Canadian First Ministers meeting. But leaders talking together has its own value, especially when the international environment is disordered and chaotic.

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Rethinking International Assistance

 

How Canada should rethink international assistance

The Globe and Mail Thursday, May 26, 2016

As the federal government rethinks its international assistance policies, it should heed the call from United Nations Secretary-General Ban Ki-moon for transformative change to global humanitarian relief.

This week’s Istanbul humanitarian conference has put the spotlight on the current state of the global relief system and the effort to reform how the world responds to humanitarian crises.

Disasters, natural or man-made, are increasing. So is the number of conflicts as well as failed and failing states. And the current system of international aid is underfunded and overstretched. The UN estimates that 125 million people need humanitarian relief. The need for smarter relief and development assistance is urgent and immediate. Rethinking our international assistance is timely and sensible.

Officials at the Istanbul conference pointed to the breakdown of international norms on asylum, the need to localize aid and frictions between those who provide relief and those who do not. The conference will provide some much-needed context for Prime Minister Justin Trudeau and other Group of Seven leaders, who are looking at aid accountability as part of their broader summit discussions this week in Ise-Shima, Japan.

While the UN is often criticized as nothing more than a talk shop, in recent months it has concluded a global climate accord and set new sustainable development goals – all of which will factor into Canada’s assistance review. The review, running from May to July, promises broad consultation with planned events around governance, pluralism, diversity and human rights as well as peace and security.

The future direction of Canadian assistance is clearly stated in the government’s discussion guide. International assistance is to advance the UN 2030 Sustainable Development agenda while applying “a feminist lens” to help “the poorest and most vulnerable people.” But to expect more money would be “unrealistic … in the current fiscal context.”

While the overall direction has yet to be determined, the differences between the previous Conservative government’s approach – an emphasis on environmental sustainability, gender equality and governance – are likely to be more tonal than substantive.

Nor is former prime minister Stephen Harper’s framework – with its emphasis on untied aid and a selective country focus – likely to change. The Liberal government has also decided, wisely, to maintain the consolidation of diplomacy, trade and development.

Much of Mr. Harper’s signature program, to improve maternal, newborn and child health, also fits into the Liberal paradigm. The government will continue supporting this initiative, but with more support for family planning and greater attention to the root causes of maternal and child mortality.

The success of the government’s development review will hinge on a number of factors.

First, investing more money. Canada currently sits in the bottom half of the members of the Organization for Economic Co-operation and Development when it comes to development assistance. While the Liberal government is right to oppose “throwing buckets of money indiscriminately,” more money, well-spent, makes more impact.

As a recent report assessing Canada’s engagement gap put it, we meet the definition of “free riders” when it comes to development and defence. If Britain can devote 0.7 per cent of its gross domestic product to development assistance and 2 per cent to defence (the North Atlantic Treaty Organization standard), shouldn’t we at least aspire to this goal?

Second, Mr. Harper was right when he underlined the importance of accountability in development. But let’s do it with a lighter touch, practise risk management and recognize that civil society organizations (CSOs) need multiyear commitments to demonstrate results. Governments insist that CSOs bring their overhead down, yet they drown them in paperwork.

Third, we can’t boil the ocean so we need to focus. Our projects will always reflect our values, but there is nothing wrong with choosing those that also complement our trade and investment interests. In Africa, for example, our development assistance should work in tandem with our resource industries’ investment to demonstrate best-in-class corporate social responsibility.

Fourth, we need to improve and develop Canadian expertise by investing in Canadian CSOs and in youth exchanges. Programs like Canada World Youth gave generations of Canadians their first international experience while giving their foreign counterparts an appreciation of Canada that has opened doors in diplomacy, trade, education and migration.

Finally, donors – especially in the West – are fatigued and skeptical about aid’s effectiveness. The Liberal government should use these consultations to reassure Canadians about the efficacy of development assistance.

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Canada and the Nuclear Security Summit

Why this week’s nuclear summit is an opportunity for Trudeau

The Globe and Mail

In the wake of the terrorist attacks in Belgium and Pakistan, this five-minute video narrated by former U.S. secretary of defence William Perry should be required viewing for the world leaders gathering this week for President Barack Obama’s nuclear security summit.

The video describes the delivery, detonation and grim aftermath of a nuclear bomb set off in Washington, D.C. The central message is that a nuclear incident – whether through accident or design – is a “nightmare scenario” worth considering.

Mr. Perry, along with fellow public servants George Shultz, Henry Kissinger and Sam Nunn, created the Nuclear Security Project in 2007 after writing about the threat posed by nuclear weapons. Their ongoing work through the Nuclear Threat Initiative sets the context for this week’s summit.

For Canada, once the world’s biggest producer of uranium, there is an important role to play in helping to secure the materials needed to make a nuclear bomb.

Shortly after taking office in 2009, Mr. Obama set out his ambitious agenda for reducing the risk of nuclear weapons. During a speech in Prague, he boldy declared his goal of “a world without nuclear weapons,” and promised to press for congressional ratification of the Comprehensive Test Ban Treaty and to negotiate a new arms-reduction treaty with Russia.

Progress has been modest. An arms-reduction treaty with Russia took effect in 2011; sanctions continue to be applied against North Korea over its nuclear and missile-testing programs; a dozen countries, including Ukraine, no longer have weapons-usable nuclear materials; and in 2015, after long negotiation, an Iranian nuclear deal was negotiated.

But challenges and threats remain. The U.S. Congress has yet to ratify the Comprehensive Test Ban Treaty, Russian President Vladimir Putin has mused about using tactical nuclear weapons and the Russians have cut off most security co-operation with the United States. And, perhaps most important, a series of nuclear summits aimed at securing, within four years, all vulnerable nuclear materials has come up short.

With this context in mind, a comprehensive agreement covering all nuclear materials should be the leaders’ goal this week. This means the global logging, tracking, managing and securing and eventual disposal of all fissile nuclear material.

For Prime Minister Justin Trudeau, who described nuclear terrorism on Tuesday as “one of the gravest threats to international security,” there is a leadership opportunity.

For many years, Canada was the top uranium producer, but it’s now Kazakhstan. Together with Australia, the three nations account for more than two-thirds of global production. What if the three agreed to become permanent stewards of used uranium products?

They would permanently “own” their uranium and ensure that its waste, including radioactive and fissible material, was properly disposed of, perhaps in mines no longer in production. While this doesn’t solve the problem of existing nuclear waste, it would control most new supply.

The International Atomic Energy Agency would provide on-site accounting oversight and supervise the transportation of all uranium. Rates would reflect risks to make it commercially and politically viable.

Given their secure geography, Canada and Australia would have to take the lead in long-term global disposal, but this requires leadership and persuasion.

Saskatchewan is home to Canada’s uranium mines and the industry is one of the largest employers of indigenous people. People in Saskatchewan strongly support their industry. They recognize the value of nuclear medicine research, but they oppose nuclear waste storage. They will need to be convinced about the safety, security and economic returns of long-term stewardship.

Nuclear energy, which emits no carbon, is also a key piece of the solution to climate-change mitigation. China is betting heavily on nuclear energy in its migration from coal. France derives about 75 per cent of its electricity from nuclear energy. Nuclear power supplies 50 per cent of Ontario’s electricity.

The nuclear genie is out of the bottle. We have to do a better job of handling its waste and curbing nuclear proliferation. As both a producer and user, Canada can take the lead in the control and containment of our own uranium.

Managing the nuclear genie will depend on technological innovation and the kind of multilateral policy creativity that we hope to see in Washington this week. The alternative, as Mr. Perry’s video portrays, would be a nightmare.

 

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