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Begin New Search Topic Trade Publishing Institution Canadian Global Affairs Institute (CGAI) Publication Year within 5 Years

1. Preferential Trade Agreements vs. Multilateralism: In the New Trump-World, Does Canada Face an Impossible Choice?

Author:
Judit Fabian
Publication Date:
03-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
International trade is often framed in starkly divergent terms: either countries choose multilateral trade agreements (MTAs) and advance the cause of global economic liberalization, or they choose preferred trade agreements (PTAs) and put the entire system at risk. Canada has a long track record of pursuing PTAs and with the Trump administration’s opposition to multilateralism, and longstanding opposition in elements of the Republican and Democratic parties, this trend will likely continue. The question is whether progress will come at the expense of the global trade system. Some economists believe PTAs to be trade-diverting, reducing trade with more efficient producers outside the agreement. Others insist that PTAs can create trade by shifting production to lower-cost producers in one of the participating countries. One prominent contrary argument holds that PTAs lead to discontinuities in tariff regimes between countries and regions, increasing transaction costs, disrupting supply chains, creating opportunities for corruption and harming global welfare, especially in developing nations. While debate continues about the effects of PTAs, a closer examination suggests that worries are overblown about their negative impacts on global trade flows. Evidence indicates that they support rather than harm the international trading system. Countries shut out of PTAs are more motivated to seek out agreements in new markets, increasing liberalization overall. They may also seek a reduction in most-favoured nation (MFN) tariffs, which would deprive PTAs of their major tariff benefits. Studies have found complementarity between preferential and MFN tariffs, revealing that PTAs promote external trade liberalization. Even if a PTA reduces a given country’s incentive to push for multilateral liberalization, it raises the odds of that country liberalizing its trade to avoid getting left behind. PTAs are a response to the difficulties of securing sweeping multilateral agreements. The World Trade Organization (WTO) Agreements authorize them under GATT Article XXIV, GATS Article V, and the enabling clause, and the WTO facilitates a degree of governance over PTAs through its dispute settlement process. Over the past 25 years, countries have adopted these deals at a rapid pace. Between 1994 and 2005, the number of PTAs increased from 50 to 200. By April 2018, 336 were in effect. At the same time, global trade has increased significantly. Between 1994 and 2010, the volume of world merchandise exports more than doubled. The proliferation of PTAs has resulted in a rise in international trade governance, because the countries involved shape their relationships in line with the WTO agreements. This juridification makes PTAs subordinate to the international system rather than giving them room to dissolve it. Canada should therefore have no fear of pursuing PTAs within the larger framework of the effort to achieve multilateral trade liberalization.
Topic:
International Trade and Finance, Multilateralism, Trade, and Donald Trump
Political Geography:
Canada, North America, and United States of America

2. Challenges and Prospects for the CPTPP in a Changing Global Economy: Taiwanese Accession and Canada’s Role

Author:
Hugh Stephens
Publication Date:
12-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
In the past, Canada has had to deal with the matter of Taiwan very delicately. China considers Taiwan to be an integral part of the nation: a rogue province that must eventually be reunified with the mainland. Since Canada relies much more on trade with China than with Taiwan, the stakes have favoured policies that avoid engaging with Taiwan in ways that would unnecessarily irritate China. As a result, there has been little appetite here for negotiating a bilateral trade deal with Taiwan. That attitude is finally changing. One main reason is because China is already angry with Canada, and vice versa. Relations between the two countries are at an all-time low, and domestic support for accommodating China is minimal. As a result, Canada is freer than before to consider negotiating a trade agreement with Taiwan. At the same time, Taiwan is interested in joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), to which Canada is already a party. By supporting Taiwan’s accession to the CPTPP, Canada can achieve a free-trade agreement with Taiwan without having to negotiate one bilaterally. The ability to do so under the aegis of a multilateral agreement should serve to mitigate any remaining concerns that China might further retaliate against Canada directly. However, striking back at China is not a reason for Canada to support Taiwan’s accession to the CPTPP. We should do so because it is in the interest of Canada and the other members of the CPTPP to add to the strength of the organization by welcoming an economy that is an important global trader and a key player in global supply chains. In addition, Taiwan is a country that is clearly willing and able to accept CPTPP disciplines. Canada should move quickly and enthusiastically to support Taiwan’s accession. The benefits of having Taiwan join Canada in a free-trade agreement are obvious. The opportunity to make it a reality is finally here. The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which entered into force on Dec.30, 2018 for six of the 11 signatories that had completed ratification at that time (Australia, Canada, Japan, Mexico, New Zealand and Singapore),1 is a beacon of hope in a dark, protectionist landscape. Along with the Regional Comprehensive Economic Partnership (RCEP) agreement, which was signed on Nov. 15, 2020, the CPTPP advances the trade and investment liberalization agenda at a time when protectionist measures by some major trading countries are threatening to undo decades of progress. The commitments and new disciplines of the CPTPP are particularly important because of malaise infecting the World Trade Organization, where the work of the Appellate Body has now ground to a halt because of actions by the United States, and to offset the negative impact of the U.S.-China trade war now underway.
Topic:
Government, International Trade and Finance, Partnerships, and Trade
Political Geography:
China, Canada, Taiwan, North America, and United States of America

3. Canada’s Historical Search for Trade Markets

Author:
David J. Bercuson
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
When U.S. President Donald Trump was elected in 2016 on a promise to cancel the North American Free Trade Agreement (NAFTA), Canada risked losing the free-trade regime that it had enjoyed with the U.S. since the original U.S.-Canada Free Trade Agreement took effect in 1989. Those who came to Canada’s rescue, by persuading the Trump administration to eventually make a new deal, the United States-Mexico-Canada agreement, were Canada’s trading partners in the United States, whose interests were threatened: Nearly two-thirds of U.S. states now have Canada as their most important trading partner. This was indicative of a long-term trade pattern of an ever-increasing closeness in trade between the U.S. and Canada. It is a pattern that started since before Confederation and in spite of not a few attempts in Canada to diversify exports away from the U.S. However, that simply cannot happen in any meaningful way: The 170-year-old pattern of Canada-U.S. trade is now so permanent as to be utterly irreversible. Since the decision by Britain to end tariff preferences for its colonies in the mid-19th century, Canada has naturally sought to penetrate the U.S. market for its exports. The desire has not always been mutual: American protectionism has, at times, hampered the export of Canadian products to the U.S., although tariff barriers have failed to stop what is a seemingly natural and, in many ways, necessary north-south flow of goods and services. Even Canadian attempts to reorient its own trade emphasis to enhance domestic east-west trade, or to expand into countries beyond the United States have made little difference. The trading relationship between Canada and the U.S. has endured through wars and in peacetime, through Republican administrations and Democratic ones. It will only continue to grow. Fantasizing about some markedly different trading future is therefore a waste of Canada’s time and energy, which should instead be expended on further penetrating the American marketplace and solidifying ties with state and local governments, local manufacturing associations, Congress and new industries. Canada should take advantage of its new trade deal with the U.S. to integrate the Canadian economy as fully into that of the U.S. as possible. There may be others like President Trump or some like him in Canada, who try to disrupt the trade relationship. That even Trump eventually was persuaded to agree to free trade with Canada is evidence, however, that an ever-closer trading relationship is simply a reality that cannot be stopped.
Topic:
Markets, History, Trade, and Donald Trump
Political Geography:
Canada, North America, and United States of America

4. A Canadian Primer to the G20 Summit in Osaka, Japan, June 28-29, 2019

Author:
Colin Robertson
Publication Date:
06-2019
Content Type:
Special Report
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
On Friday, June 28, Japanese Prime Minister Shinzo Abe hosts the leaders of the 19 major economic nations and the European Union in Osaka, Japan. As G20 finance ministers noted after their meeting earlier this month “growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified.” Created in the wake of the 2007-2008 “Great Recession”, the G20 is economic multilateralism at work, an insurance policy to prevent globalization going off the rails. This 14th G20 summit is the culmination of a year-long series of ministerial meetings, hosted throughout Japan. G20 leaders are a diverse group – liberal democrats, authoritarians and autocrats. While the plenary sessions are the point of the meeting, attention will be on the interactions between U.S. President Donald Trump and Chinese President Xi Jinping. Can they start to undo their trade war or will tariffs continue to escalate? While the focus is geo-economics, the geopolitics are always present. After abandoning the nuclear deal with Iran, the Trump administration has re-imposed sanctions and tensions have risen with recent actions, attributed to Iran, against container ships and a U.S. drone. China continues to muscle into the South China Sea. HMCS Regina and MV Asterix recently transited the Straits of Taiwan and sailed into these international waters. Russia still occupies parts of Ukraine. Ukraine now has a new president and parliamentary elections are underway. Canada hosts the third Ukraine Reform Conference this July in Toronto. There is little discernible progress in the U.S.’s negotiations with North Korea over its nuclear and missile capacity. Canadian ships and aircraft are part of the international sanction efforts on North Korea. Conflict continues in Yemen, Syria, Iraq, Afghanistan and Central Africa and famine ravages parts of Africa. The United Nations High Commissioner for Refugees reports there are over 70 million displaced persons. Among them are 25.9 million refugees, over half of whom are under the age of 18. With millions of stateless people not just in the Middle East and Africa, but in Asia and Latin America, it is estimated that one person is forcibly displaced every two seconds. Canada resettled more refugees than the United States in 2018, the first time the U.S. did not lead the world on this measure in decades. Human rights are also part of the backdrop. China has said it will not permit any discussion of the Hong Kong situation because it is China’s “internal affair”. According to the UN Special Rapporteur, there is “credible evidence” that Prince Mohammad bin Salman, a participant at the G20, is liable for the killing of Washington Post columnist Jamal Khashoggi. Saudi Arabia is to host next year’s G20, but does this not give de facto impunity to MBS?
Topic:
G20, Geopolitics, Multilateralism, Trade, and Primer
Political Geography:
Japan, Canada, and North America

5. A Primer to the G7 Summit in Biarritz August 24-25, 2019

Author:
Colin Robertson
Publication Date:
08-2019
Content Type:
Special Report
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
On Saturday 24th and Sunday 25th of August, the leaders of the major western democracies will meet in their 45th summit. They will discuss global geopolitical and socioeconomic issues in Biarritz, a seaside resort in Basque country on the Atlantic coast, made famous in the 19th century as the summer playground of Europe’s elite. As the host, French President Emmanuel Macron is focusing on inequality: be it income, gender, education, healthcare or access to drinking water. But can M. Macron bring his fellow leaders into consensus given their diverging perspectives on diverse issues including gender, work, climate, energy, protectionism, populism and extremism? What will be the chemistry between the disparate leaders, including the new member of the group, Boris Johnson? And how will these heads of state manage Donald Trump? Will there be a communiqué? As Justin Trudeau will ruefully recall, the US president upended last year’s Charlevoix summit revoking the US agreement to the communiqué while en route to meet Kim Jong-Un in Singapore. There will be various measures of success in Biarritz, but it will be important for leaders to say something and do something on Hong Kong. Keeping the spotlight on this international city will be important to restrain China from rash action. As the principal guardians of international covenants, the G7 leaders have an obligation to Hong Kong. It will also be important for the leaders to make some sort of statement on trade measures. If we are moving into an economic decoupling with China, then it will be vital that the G7 hangs together. A recession will only incite more populism and aggravate the inequalities that are the focus at Biarritz.
Topic:
Geopolitics, Inequality, Multilateralism, Trade, and G7
Political Geography:
Canada and France

6. The Global Exchange (Fall 2019)

Author:
Christy Clark, Monica Gattinger, Wilfrid Greaves, P. Whitney Lackenbauer, Geoffrey Cann, Matthew Foss, Kelly Ogle, Jean-Sebastien Rioux, Wenran Jiang, Robert Seeley, Dennis McConaghy, and Ron Wallace
Publication Date:
09-2019
Content Type:
Journal Article
Journal:
The Global Exchange
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
The demand for Liquefied Natural Gas (LNG) continues to grow and Canada’s unconventional reserves remain amongst the very best in the world. With political will and an appetite to embrace gas the way Premier Lougheed once championed oil, we can still put the wealth of Western Canadian gas to work for the good of all Canadians. The papers that follow will be essential pieces for policy makers as they map out the path to Canada’s next great economic transformation.
Topic:
Foreign Policy, Climate Change, Energy Policy, Environment, Oil, Gas, Risk, and Trade
Political Geography:
China, Canada, Australia, and North America

7. The Global Exchange (Spring 2019)

Author:
Adam Frost, Colin Robertson, Randolph Mank, Robert Hage, Claudia Marín Suárez, David J. Bercuson, Julian Lindley-French, and David Perry
Publication Date:
03-2019
Content Type:
Journal Article
Journal:
The Global Exchange
Institution:
Canadian Global Affairs Institute (CGAI)
Abstract:
The international arena is as dynamic as ever. The rate of technological development continues to accelerate beyond the pace society is capable of adapting to it. Climate change indicators are approaching and surpassing key thresholds, fragile and failed states are proliferating, and great power competition has returned. Given the magnitude of these challenges, the cultivation of friends, partners and allies is paramount to furthering Canada’s national interests beyond its borders. The lead package of this issue examines some of the global challenges facing Canadian policy-makers and offers recommendations for how best to navigate this unruly world. Colin Robertson outlines today’s messy international arena and emphasizes the importance of Canada’s active engagement. He explains why Canadian leadership must carefully manage the Canada-U.S. relationship and the necessity of supporting multilateral co-operation to stand up against disruptive revisionist powers. He also says Canada should enthusiastically support the implementation of recent trade agreements and address the causes of social upheaval in the Western world. Considering the release of the Trudeau government’s extensive defence policy review, Randolph Mank questions why a similarly extensive foreign policy review was not first conducted. He argues that Canadian foreign policy is misaligned with Canada’s national interests, and therefore, a comprehensive strategic realignment is warranted. Canada’s interests are not best served by ad hoc prescriptions. Robert Hage turns to Canada’s energy policies. He criticizes Bill C-48 for limiting transportation options for Canada’s most valuable hydrocarbon resources. He argues that building infrastructure to the West Coast to facilitate the export of Canada’s oil and gas resources should be handled as a nationbuilding project, vital to Canada’s economic well-being. Francisco Suárez Dávila’s article provides an overview of President Andrés Manuel López Obrador’s first 100 days in office. Mexico’s new leader is a key figure for Canadian policymakers to understand as they manage the trilateral North American relationship, and work to ratify and implement CUSMA. David Bercuson, Julian Lindley-French and David Perry turn to Canada’s defence and security. Bercuson argues NATO is alive, well, and not going anywhere soon, as the Russian threat to Europe remains ever-present. Lindley-French outlines the tactics of Russia’s coercion, the extensive modernization of its military forces and the ambitions that threaten its European neighbours. Finally, Perry returns to Canada’s Strong, Secure, Engaged defence policy two years after its release to provide an assessment of how closely the Trudeau government has followed its spending targets. The 21st century has the potential to be the most violent and chaotic century in human history – or the most prosperous, providing more people with a higher quality of life than any previous era. If Canada’s policy-makers are to successfully manage the challenges of this unruly, messy world, they will have to vigilantly align Canada’s means with its desired ends, including working with other states, like-minded or otherwise, to advance common interests.
Topic:
International Relations, Foreign Policy, NATO, Climate Change, Oil, and Trade
Political Geography:
Russia, Canada, North America, and Mexico