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Canada's "Progressive" Trade Agenda: Let's be careful how far we push it

Hugh Stephens
Distinguished Fellow, Asia Pacific Foundation of Canada
Vice-Chair of the Canadian National Committee for Pacific Economic Cooperation (CANCPEC)

 

Back in October of 2016 when the Canada-EU Comprehensive Economic and Trade Agreement, (CETA) was on the cusp of closure, the negotiations hit a roadblock when the Belgian region of Wallonia blocked the necessary consensus for the EU to conclude with Canada. Chrystia Freeland, who was then the minister of international trade, walked out of the negotiations in Brussels and packed her bags to return to Canada. She lamented that “… it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada, even with a country as nice and as patient as Canada.” A core element of her argument was that Canada and Europe shared common values, and therefore the path to an agreement should have been open. As we know, a compromise satisfied Wallonia’s concerns, mainly regarding the so-called investor-state dispute settlement process which allows foreign invested companies to sue governments for alleged discriminatory practices that negatively impact their investments. Canada and the EU went on to sign the agreement, most of whose provisions came into effect on Sept. 21, 2017. The government of Canada has cranked up its communications machine and is touting CETA as “a progressive trade agreement for a strong middle class”.

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The trouble with Canada’s ‘progressive’ trade strategy

Hugh Stephens
Distinguished fellow, Asia Pacific Foundation of Canada
Vice-Chair of the Canadian National Committee for Pacific Economic Cooperation (CANCPEC)

 

It hasn’t been a good few weeks for the Trudeau government’s “progressive” trade agenda.

First, the unwillingness of some countries to swallow elements of the progressive agenda was at least partially responsible for the sudden postponement of an announcement around the Trans-Pacific Partnership (TPP) last month in Vietnam. The announcement was expected to confirm that the 11 TPP economies had reached an agreement in principle to conclude the pact.

Then an expected agreement on the start of free trade talks with China did not materialize during Justin Trudeau’s Beijing visit earlier this week, blocked by Chinese objections to including “progressive elements,” such as labour and gender rights, in the negotiations.

In both cases, talks have not been completely derailed, but it is fair to say the outcome is not what was expected. And in both instances this progressive agenda has been fingered as a principal cause.

Given the fact that progressive trade is proving controversial, it is worth examining what the concept actually means. It has become the term of choice for the Trudeau government, a branding exercise that seeks to distinguish the Liberals from the Harper government. The thinking then goes, if the TPP — negotiated by the Conservatives — was unpopular with some elements of Canadian society, why not change the dial, add some “progressive” elements and even modify the name? Thus the new version of the TPP (with its 11 economy members, down from 12 since the United States backed out) is now the “Comprehensive and Progressive Trans-Pacific Partnership.”

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