Canada and its Trade Deals

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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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CETA Summit

Canada-EU trade deal close to completion. Now the hard work begins

The Globe and Mail  Tuesday, Sep. 16 201

There will be justified celebration later next week when Prime Minister Stephen Harper and European Union Commission President Jose Manuel Barroso meet to mark the end of negotiations over the Comprehensive Economic Trade Agreement (CETA) and the Strategic Partnership Agreement (SPA).

These agreements open doors. Now we must take advantage of them.

Translating CETA’s potential into real gains requires all levels of government, working with business, to get our goods and services to market and then to sell them within the EU.

The agreements realize the long-held Canadian goal of closer economic links with Europe. CETA sets the standard for the next generation of trade deals including the EU-U.S. Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership.

CETA has been a long time coming.

A trans-Atlantic economic community was meant to complement the NATO collective security pact (1949) but there was insufficient business interest on either side of the Atlantic. In the mid-1970s, Pierre Trudeau sought counterweights to the United States through contractual links with Europe and Japan but there was little business appetite.

Brian Mulroney’s vision and determination convinced Canadians that our sovereignty would be enhanced, rather than jeopardized, through freer trade with the United States. Jean Chrétien finessed Liberal opposition to freer trade through the NAFTA environmental and labour accords. Enlisting the premiers, Mr. Chrétien successfully marketed the Canada brand through the Team Canada missions, at the same time demonstrating the kind of political leadership still essential in Asian markets.

Our economy enjoyed a decade of trade-inspired growth, convincing Canadians that we can successfully compete globally.

The Harper government is deservedly self-congratulatory over the negotiation of CETA. It took awhile for PM Harper to realize that the road to Brussels really goes through Brussels and the EU Commission not member states. Meanwhile, we tested the patience of the EU’s Barroso and Trade Commissioner Karel de Gucht.

CETA confirms the provinces as full partners in Canadian trade negotiations. They have competence, especially in marketing, and share constitutional authority in many of the areas, like procurement, that now dominate trade negotiations.

CETA owes much to provincial initiative. Then-Quebec premier Jean Charest convinced then-French president Nicolas Sarkozy to champion the start of negotiations. As Quebec’s chief negotiator, former premier Pierre-Marc Johnson, managed the transitions in Quebec governments while maintaining a pan-Canadian approach.

Business wanted this deal. The Canada Europe Roundtable for Business, notably Roy McLaren and Jason Langrish, were tireless advocates and intermediaries in making it happen. Their continued involvement is essential. We need their help in identifying CETA business champions within the EU.

CETA is still many months from implementation. After the legal scrub, the deal requires translation into 24 official languages, approvals by the EU Council and Parliament, then ratification by its 28 member states. Canadian legislation – federal and provincial – will also be required.

The intervening months should be used to better position ourselves for CETA.

First, we need to get our house in order:

-Build the infrastructure to get our goods to market including construction of the west-east pipelines and terminals. Renovate our roads and rail, ports and airports. The Harper government’s new ‘Building Canada’ plan is a good start but we need a national transportation strategy.

-Get on with freer trade internally, including reform of supply management.

Second, we need to market our goods and services within the European Union:

-Concentrate on those sectors and services where we have a competitive edge: mining, agriculture, animal health and research, oil and gas, financial services, aerospace.

-Make the Canadian brand in products, like pork and beef, a premium product, as New Zealand has done with its lamb.

-Position ourselves into existing EU supply chains, taking advantage of our access to the United States and Mexico and our gateway to the Pacific.

-Restart the Canada-EU Energy Dialogue to focus on transportation and infrastructure. Our oil and gas offers reliable, strategic energy security, an alternative to current EU dependence on Russia and the Middle East.

-Resurrect the “Team Canada” playbook through partnering all levels of government in marketing our goods and services. The practical work of matchmaking companies has already started through the Canadian Manufacturers and Exporters’ Enterprise Canada network.

-Set targets for each EU country. CETA forecast a 23 per cent increase in trade. Incorporate these metrics into our ambassadors’ mandate letters.

-Rethink selling off our official residences. Instead, use them as marketing platforms. Mr. Chrétien, arguably our best salesman-prime minister, understood that you don’t do diplomacy from your basement.

With CETA finally negotiated, our attention turns to the systematic marketing of a “Made in Canada” brand that is synonymous with reliable delivery, excellent service and superior products.

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A former diplomat, Colin Robertson is vice-president of the Canadian Defence and Foreign Affairs Institute and a senior adviser to McKenna, Long and Aldridge LLP

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Canada needs to conclude EU deal

Canada needs to conclude EU trade deal

The Globe and Mail Tuesday, Jun. 10 2014

Within last week’s G-7 communiqué was a commitment to conclude outstanding trade agreements. Topping this list was the Canada-EU agreement. We need to close this deal.

Leaders also promised to strengthen the rules-based international trading system and to fight protectionism, and underlined the role of trade and investment as “key engines for jobs and growth.”

In the architecture of post-World War II institutions, the multilateral trade arena – first through the GATT and now the World Trade Organization (WTO) – raises global incomes and contributes to poverty reduction.

Trade negotiations, once the preserve of the trade-policy cognoscenti operating behind closed doors, are today highly public, very political and polarized on various fault lines: rich vs. poor, developed vs. newly developed nations.

Ambition is returning to the WTO, but negotiations among 160 members will be slower, and with more compromises, than focused initiatives among like-minded nations. Last year’s WTO ministerial meeting in Bali resulted in a Trade Facilitation Agreement that G-7 leaders have promised to swiftly implement.

Ultimately, in an era where goods are “made in the world” of supply chains, and of trade largely intra-firm or connected to global value chains (by some estimates, 80 per cent of all trade), business itself will demand one set of rules and the WTO likely will reassert its primacy as the main table.

For now, serious trade negotiations are conducted either bilaterally or regionally that increasingly head into “beyond the border” domestic regulations, public policy choices on investment (and dispute settlement) and innovation (intellectual property) and, for Asia, state capitalism.

The result is a ‘spaghetti bowl’ of different agreements. Companies parse the different agreements for advantages relating to differing rules of origin or intellectual property protection.

For Canada, trade and investment is vital to our continued prosperity. We rank 12th in the WTO table of leading exporters and importers and 17th in trade in commercial services. Half of what we produce is exported.

Include inter-provincial commerce and 80 per cent of our economy depends on trade. If we could bust barriers between provinces it could be even higher, with commensurate gains to consumers and provincial coffers.

Opening doors to trade involves the short-term pain of adjustment (eased through training in new skills). Better market access and improved productivity result in long-term gains, as demonstrated after implementation of the Canada-US FTA and NAFTA.

The Harper government boasts that it is creating the conditions for trade through an activist global markets plan – now 15 trade offices in China – and building infrastructure at home in the form of roads, rail, bridges, ports and pipelines.

Progress on our major trade negotiations can be grouped into three baskets:

  • What is important but won’t move fast: TRans Pacific Partnership is effectively stalled until the United States can secure Trade Promotion Authority from Congress. The Canada-Japan Economic Partnership plays a distant second fiddle to the TPP. Before the Japanese seriously engage they want assurance of pipelines to our Pacific coast with LNG terminals.

Then there is the Canada-EU Comprehensive Economic and Trade Agreement (CETA).

Announced triumphantly last October, CETA is not wrapped up. International Trade Minister Ed Fast says the issues are technicalities. Others suggest there remain hurdles around issues like investor-state dispute settlement, intellectual property and financial regulations. EU Ambassador Marie-Anne Coninsx recently warned that “if it drags on too long then …momentum might get lost.”

For the EU and USA, CETA serves as a guide for their own negotiations.

Championed tirelessly by the Canada Europe Business Roundtable, Canadian business leadership wants a deal.

Canadian provinces, initially divided on CETA’s efficacy, are now invested in the agreement. Provincial participation at the negotiating table changes permanently, for the better, the future conduct of trade negotiations.

CETA symbolizes the Harper government’s trade agenda with ministers and MPs criss-crossed the country its case. In Brussels last week, Prime Minister Harper linked hands with EU Commission President Jose Barrosso.

But Mr. Harper did not bring home the bacon.

In trade negotiations, perfection is the enemy of the good. To get a lot, you have to give a little. Nor does delay make for a better deal. It can make for a lost deal.

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Canada and St. Petersburg G20

Harper needs to play the ‘reliable ally’ card at the G20


The Globe and Mail Wednesday, Sep. 04 2013

Prime Minister Stephen Harper goes to the Constantine Palace in St. Petersburg on Thursday for the G20 summit. He has three roles to play: To be a good friend; a reliable ally; and, always, to be our chief diplomat in advancing Canadian interests.

The backdrop to this summit is Syria, especially now that U.S. President Barack Obama has delayed an armed response until he has the sense of Congress.

In Britain, last week’s House of Commons defeat has left a diminished Prime Minister David Cameron. Mr. Cameron will appreciate the advice of the like-minded Mr. Harper, who also understands the challenges of parliamentary government.

Mr. Cameron and his foreign minister William Hague are Mr. Harper’s staunchest foreign friends and supporters. They are also our steadfast advocates within Europe for the stalled Canada-Europe trade agreement.

Mr. Obama is likewise afflicted by Syria. He comes to St. Petersburg seeking allies. He will welcome Mr. Harper’s assistance in building international support to enforce the norm against the regime of Bashar al-Assad for using poison gas.

When blunt language is required, Mr. Obama can count on Mr. Harper, especially during the almost-certain debate on Syrian intervention with Russian President Vladimir Putin. In the lead-up to the Lough Erne G8 summit, Mr. Harper condemned Mr. Putin’s support of the “thugs of the Assad regime” and underlined the “G7 plus one” divide between the West and Russia.

The Harper-Obama relationship is not that of Harper-Cameron, but Mr. Harper understands that the dynamic of a successful Canada-US relationship depends on being a reliable ally.

The Keystone XL pipeline permit process is frustrating but Mr. Harper will recognize that the Canadian ‘ask’ has evolved into another pawn in the polarized world of Washington politics. Mr. Harper can help our cause by giving the President a preview of our forthcoming oil and gas regulations and their contribution to abating climate change.

A useful contribution to collective trade liberalization would see the two leaders recommit to their initiative on border access and regulatory alignment. We need to match the progress we have made on perimeter security with an expedited flow of people, goods and services.

Mr. Harper should push Mr. Obama on country-of-origin labelling, a noxious piece of U.S. protectionism that is effectively blocking Canadian beef and pork exports. It is also an issue on which he and Mexican President Enrique Pena Nieto can make common cause.

Curbing protectionism is a constant challenge. In the last year, the Global Trade Alert has catalogued a record 431 new protectionist measures with the majority imposed by G20 nations. With our economic growth dependent on trade, Canada has vital interests in further trade liberalization.

In his separate meetings with fellow leaders, Mr. Harper needs to advance the Canadian case for the Canada-Europe trade agreement and the Trans-Pacific Partnership.

The Trans Pacific Partnership would cover 40 per cent of global economic output and about a third of world trade. It aims to become the gold standard for other trade pacts. With key leaders present in St. Petersburg, side conversations can help set up progress at the next round in Bali. Canada and the U.S. have both committed to concluding the TPP negotiations this year.

If only the Canada-Europe talks could progress that quickly: Now into their fifth year of negotiations, the Europeans are increasingly skeptical that Mr. Harper wants a deal.

The Europeans thought it would be done by the end of January. The British were ready to run interference for us in Lough Erne but the offer was apparently declined. The European leadership from Brussels will be in St. Petersburg.

Mr. Harper should seize the moment and conclude the deal. When it comes to trade liberalization, half a loaf is much better than none.

European attention is rapidly shifting to the potential deal with the United States, while the EU leadership who have invested in this deal, will change next May with the EU elections.

Credit Paul Martin, Mr. Harper’s predecessor, as the architect of the G20. As Finance Minister, Mr. Martin showed foresight in recognizing that globalization obliged a new, more inclusive forum to act as the clearing house for global financial and economic issues.

The worth of summits is rarely reflected in their communiqués. More will draft that document than will read it. The utility of summitry is the process of consultations leading into the summit and then in the frank talk between leaders when they meet. What happens at the main table is usually less relevant than in the corridor discussions. It is there that things get done.

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Canada Europe Trade Agreement

Inside the Canada-Europe trade talks: How politics are undermining the deal

Special to The Globe and Mail Wednesday, Jun. 19 2013

A man on a mission, Prime Minister Stephen Harper is using his European tour and the G8 summit to advance the Canada-Europe free-trade agreement – known as the Comprehensive Economic and Trade Agreement with the national leaders who constitute the European Union’s ‘board of directors.’

CETA was the central message in his meetings with British Prime Minister David Cameron, French President François Hollande, and Irish Taoiseach Enda Kenny. He urged the Europeans to take what he described as a ‘monumental’ and ‘historic step’ that promises to increase two-way trade by 20 per cent.

We both want a deal.

The Europeans thought we should have had a deal in January. That we do not has left both sides frustrated.

The Europeans see this agreement as laying an opening framework for their trade negotiations with the United States – “the biggest bilateral deal in history” – that begin next month in Washington.

For Canada, the EU deal would also be a trampoline to potential progress in the ongoing Trans-Pacific Partnership trade negotiations.

For Mr. Harper, a deal would help change the channel on domestic travails. Better for the Tory caucus to be defending the trade deal on the barbecue circuit this summer than running defence on Senate follies.

But by publicly raising the ante on CETA, Mr. Harper risks leaving the impression with the EU that, for Canada, this deal is a necessity. For the Europeans, it is merely desirable. It enjoys nowhere the level of public attention in Europe as it attracts in Canada.

The Europeans carefully studied our system before entering into negotiations and, because trade and commerce is a shared federal-provincial power, they insisted that the provinces be at the bargaining table. As a result, joke the Europeans, when the Canadians come to Brussels they could fill a European Airbus, while the Europeans would fit comfortably into a Canadian Challenger.

The Europeans are surprised at our stubbornness and inflexibility on key issues. There is also a sense we tried to do an end run around their negotiators during the spring visit to Canada of French Prime Minister Jean-Marc Ayrault, and and again with Prime Minister Cameron during Mr. Harper’s visit to London for the funeral of Margaret Thatcher.

The Europeans argue that if we succeed with a deal through such an end run, then negotiations will be doubly difficult with United States. The EU is requiring a guarantee in the form of congressionally-approved Trade Promotion Authority from the Obama Administration to ensure an up-or-down congressional vote passage of any deal.

The EU system was designed to prevent end-runs, in part to insulate leaders from such pressure. They say we need to understand that in their process the route to a deal runs only through Brussels.

But does it? Even Europeans will tell you that key decisions are still made in Berlin, Paris and even London and that the eight presidents of the various European institutions are not in the same league as the national leaders.

The presumption was that European Trade Commissioner Karel De Gucht, a former tough-minded Belgian Foreign Minister, held the EU negotiating mandate. He does, but he operates within the European Union system.

Too often in the negotiations there has been a sense on the Canadian side that the decisions are made within the rival directorates within the labyrinth of the Brussels bureaucracy. Canadians have ruefully experienced the reality of Henry Kissinger’s jibe about European unity: “Who do I call if I want to call Europe?”

But, given our own federal system, complexity in governance is something that we should have figured out beforehand.

The outstanding issues are difficult but not impossible. It is now down to a give-and-take on these key points:

  • How far do we give in terms of patent protection for pharmaceuticals?
  • How much access do we get for our pork and beef?
  • How much access do we give to cheese and dairy imports?
  • How much are both sides willing to give in terms of government procurement, especially for local and sub-state purchasing?
  • Can we use the agreement to push back threatened restrictions on oil sands products?
  • How do we establish rules on financial services, with Canada holding the moral upper hand?
  • Can we define the rules of origin on everything from cars to beef to chocolate. Supply-chain integration means much of what is ‘Made in Canada’ includes parts from the United States. The EU doesn’t want to give away now what will be negotiable with the Americans.
  • What are obligations in the Strategic Partnership Agreement that the EU insists upon will be part of the package?
  • What are the exemptions that inevitably will reduce the potential benefits of the agreement?

Mr. Harper could do with advice from someone who appreciates his situation. He should call Brian Mulroney. The architect of the Canada-US free-trade agreement, the North American free-trade agreement and the Acid Rain Accord, Mr. Mulroney understands the sensitivities of the end game and how to manage the caucus, the provinces and the public.

After four years of negotiation, we should be popping the corks on the Champagne (or the Canadian ice wine). It would be a terrible shame if this deal goes flat, not on policy differences, but because of the mechanics of the negotiating process.

A member of the teams that negotiated the FTA and NAFTA, Colin Robertson is vice president of the Canadian Defence and Foreign Affairs Institute and a senior advisor to McKenna, Long and Aldridge, LLP.

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Canada-Europe Trade Deal and the US

Excerpted from A Canada-Europe trade deal represents a great opportunity. Can we seize it? by John Ibbitson Globe and Mail February 13, 2013

…Now the Americans also want a free trade agreement with Europe. Canada is already ahead of them. An agreement on CETA was due in December. The new deadline is March or April.

With the United States about to take centre stage, Canada risks being pushed off the stage entirely, unless it can wrap up the talks by April at the very latest.

“We’d better get our act together and conclude these negotiations quickly,” said Colin Robertson, the former diplomat who now writes and advises on trade issues, “because all of the oomph and energy on the part of the Europeans is going to immediately shift to what they see as the bigger game: the US-EU negotiations.”

As Mr. Robertson pointed out, in the last decade Canadian dithering froze this country out of a free-trade agreement with South Korea, once the Americans stepped in to do their own deal.

The reason for the delay on the Canada-European agreement is that CETA would be a very 21st-century deal. Rather than simply lowering tariffs on manufactured goods, it aims to open up government procurement to foreign bidders, to lower agricultural tariffs and to enhance patent protection, especially in pharmaceuticals…

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