Progressive Trade, Regressive Results

Globalization, Lee Harding

If Brett Wilson were still taking business pitches on Dragon’s Den, he would never partner with Canada’s trade negotiators. During a recent television interview, he openly wondered whether or not the negotiators were “delusional, naïve, or stupid.”

It seems he settled on stupid, saying: “Right now we’re trying to build on this social agenda of respect and dignity and this global perspective which is borderline stupid…. The environmental agenda or the gender equality agenda or any other agenda that we are putting on the table, [with trade] we’re talking about a business agenda. We aren’t naive, we’re stupid.”

The prime minister, dubbed “selfie king” by Wilson, seems proud to tout Canada’s insistence on injecting social agenda issues into economic negotiations. “Progressive trade is possible,” Trudeau stated, pointing to the recently re-hashed Trans-Pacific Partnership. It is not entirely clear whether “progressive” agendas actually represent progress, but it is even harder to establish that such agendas are promoted in the TPP.

The federal government says the new TPP is socially superior to the former deal, which encompassed 12 nations until the United States withdrew a year ago. The agreement includes the protection of cultural industries from competition, similar timeframes for generic drugs to appear in the marketplace, and no new powers for foreign companies to sue Canada. In other words, Canada managed to save a portion of its existing sovereignty while calling the agreement “progressive.” The final claim includes “fully enforceable” chapter on labour and the environment. Details are sketchy because the full text has not yet been released.

Nevertheless, such details are an important concern for industry leaders because they assess deals on financial impacts. Access to the Japanese market will be a boon for Canadian pork, beef, grain, and lumber. Meanwhile the auto and steel industries fear increased competition from nations with cheap labour.

“There is nothing remotely progressive about the TPP,” said Jerry Dias, president of Unifor, who may soon have fewer auto workers among its 315,000 members. His comments prove that even progressives care more about jobs for workers and money from union dues than such nebulous social goals as gender equity and outrageous environmentalism.

This is not to say that Trudeau has no domestic allies. John Manley, a former Liberal cabinet minister who currently heads the Business Council of Canada, told reporters in Davos, “By saying Canada is part of TPP–without saying so–the Prime Minister is saying: ‘I am not Donald Trump,’ and that is a good thing.”

How strange. Through this progressive but non-progressive trade agreement, Canada has now said that Justin Trudeau is no Donald Trump. And it is bizarre to suggest that this is good in terms of trade negotiations given that Trump is in a league of his own when it comes to success at “The Art of the Deal.”

The Trudeau approach where values are more important than practicality seems poised to sink NAFTA. In January, Canada was compelled to tattle to the World Trade Organization about its greatest trading partner—The U.S.A. The complaint listed 200 incidents of anti-dumping and anti-subsidy duties from Washington, even though the overwhelming majority of these incidents had nothing to do with Canadian trade.

“Canada’s complaint is bad for Canada,” said, Robert Lighthizer, the U.S. Trade Representative. “Even if Canada succeeded on these groundless claims, other countries would primarily benefit, not Canada.” In fact, if acted upon, these complaints would lower Canada’s share of American imports of steel, aluminum, lumber, and paper. As it is, Lighthizer called the move “a broad and ill-advised attack on the U.S.”

For his part, Brett Wilson has no intention of attacking the United States. In fact, the part-owner of the Nashville Predators is ready to invest even more there. Let’s just say that lower taxes and reduced regulations outweigh his uncertainty over the future of NAFTA.

As for Canada’s other big trade negotiation, that is, with China, Wilson sounds as frustrated as a football fan watching his team repeatedly drop the ball. “[In China] they’re building 1,600…coal-fired power plants right now, and we’re saying we’re going to reduce greenhouse gases with our carbon tax. And they expect China to respect what we are doing. They don’t care.”

Canada is trying to include politically correct values in trade deals. Political correctness can never be the foundation of an economic deal, especially when it involves countries who do not care about such social policies. Wilson may be right when he says it is “delusional, naïve, or stupid” to make carbon emissions and gender equality the integral component of such negotiations.

When will team Canada understand that?