Trade

Continuing my search for a candidate or a party, I’m looking at trade this week. In a previous post (27 April 2019) I stated that left-leaning parties support fair trade while right-leaning parties support free trade. Trade agreements signed by right-leaning governments should contain fewer pages. And that has been generally true for Canada in the past.

Theoretically, the original Canada-USA Free Trade Agreement (CUSFTA) should have been an agreement between a Canadian Conservative PM and an American Republican President. And it was. It was negotiated by Mulroney and Reagan and became effective 2 January 1988. The Canadian election in 1988 was fought, in large part, over CUSTFA. The anti-free trade Liberals and NDP split the vote and the Conservatives were returned.

Almost immediately, in 1989, Bush-Senior (Republican) and Mulroney (Conservative) began negotiations to include Mexico in a North American Free Trade Agreement (NAFTA) building on CUSTFA. Mulroney, however, was replaced by Kim Campbell as PM and the Liberals under Chretien – who campaigned on a promise to re-negotiate or abrogate NAFTA – took Parliament in 1993. Chretien and Bush re-negotiated NAFTA but Chretien added agreements on labour (the NAALC) and environment (the NAAEC). See how fair trade makes for longer documents? Bush wanted it done during his presidency but failed. Fair-trade NAFTA came into being on 1 January 1994 over the signatures of the Liberal PM Chretien and the Democrat President Clinton.

Was NAFTA good or bad? Depends who you ask. It was a net benefit to the USA and Mexico – no doubt. It was good for some parts of the Canadian economy. The seven-figure earnings of my company from 1999 through 2011 were 90% dependent upon NAFTA. Without NAFTA my company would have been restricted primarily to Canada and the UK. Our EU activities would not have been affected but there would have been no US work.

And then things got weird. Along came the former Democrat, now Republican, DJ Trump. Instead of being pro-free trade or even pro-fair trade, he is protectionist. Bernie Sanders and Donald Trump stand on the same platform when it comes to trade. Trump (solitary member of the Inconsistent Party) forced negotiation of a new NAFTA with a Liberal PM who should be pro-fair trade. The result, agreed on 30 September 2018 but not yet ratified, is the United States–Mexico–Canada Agreement (USMCA). It is not in effect and it might never be.

USMCA goes head-to-head with the TPP (Trans-Pacific Partnership) but the TPP failed when the USA withdrew. The replacement – minus the USA and minus 22 provisions that the USA had insisted upon – is called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11). It came into effect on 30 December 2018 under Trudeau-Junior.

As important as trade is to Canada and Canadians, can I find sufficient evidence in the record to be confident that I know how any of the parties would proceed if they were to form the government?  Maybe. For sure, Liberal, NDP, and Green trade agreements are likely to be long-winded and complex, full of regulation, and at significant risk of unintended consequences.

I’m still looking.

Stuart Syme