Finance Minister Jim Flaherty says his government’s move to raise tariffs on goods imported from Thailand and 71 other countries is not facing any objections as he meets with senior Thai officials in Bangkok.
Mr. Flaherty spoke with reporters via a conference call from the Thai capital, which took place on Thursday morning local time, Wednesday evening in Canada.
The minister’s Asian trip began Monday in Hong Kong, where he spoke to a business audience and later met for dinner with Hong Kong financial secretary John Tsang. Mr. Flaherty spent Tuesday, Wednesday and Thursday in Bangkok, where he met with business groups and government officials responsible for trade and finance.
The Finance Minister said he regularly travels abroad to promote Canada’s fiscal record after tabling a budget. He said the goal is to promote investment and trade with Canada.
“In Thailand I’ve already had a fairly lengthy business round table and also a business reception here and I’ve also met with the Deputy Prime Minister and the Minister of Finance, none of whom raised the issue of the General Preferential Tariff,” he said.
Mr. Flaherty’s 2013 federal budget removed 72 countries from Canada’s General Preferential Tariff, a decision that industry says will increase the price of affected imports by about 3 per cent. The minister has said the special tariff was an out-of-date foreign aid program.
China and Thailand import more goods under the preferential tariff than any other country, according to Finance Canada. Opposition parties have criticized the government for highlighting the budget’s $76-million-a-year tariff reductions on sporting equipment and baby clothes, while playing down the budget’s tariff increases, which are expected to bring in $333-million a year by 2015.
Mr. Flaherty said he encouraged further trade talks in his meetings, but the focus was on drawing attention to Canada’s economics, such as its AAA credit rating. “The first goal is to make sure that people are aware of the soundness of the Canadian economy, the soundness of our fiscal foundation,” he said.
Yuen Pau Woo, president and CEO of the Asia Pacific Foundation of Canada, said Mr. Flaherty’s decision to promote the budget in Asia should not come as a surprise.
Mr. Woo noted that Prime Minister Stephen Harper has clearly stated that he wants to diversify Canada’s economy through increased trade with Asia. Further, the source of international investment capital is increasingly concentrated in Asia, and Mr. Woo said it makes sense for Mr. Flaherty to remind investors of Canada’s AAA credit rating, especially at a time when other nations like the United States, the United Kingdom and France are facing credit downgrades.
Also, Mr. Woo said, the Canadian government likely realizes it has a lot more work ahead in order to deliver on its Asian strategy. “The reality is the diversification priority in this government is still aspirational rather than actual. I think they know that very well. We haven’t closed any free trade agreements in Asia,” he said. “I guess the Finance Minister’s trip there is a way of saying we really want to catch up.”
Monitoring of Asian media reports by the Asia Pacific Foundation has found Canada’s budget move is not garnering any controversy or attention, according to Mr. Woo.
The moves are certainly attracting attention in Ottawa, however, where the NDP peatedly attacked the proposed new tariffs as a hit on consumers. With the House of Commons heading into a two-week recess that begins Thursday afternoon, NDP MP Peter Julian said he finds Mr. Flaherty’s travel plans “curious.”
“My constituents think it’s curious as well. When you table a budget, a finance minister is supposed to stand up and defend that budget,” Mr. Julian said. “Mr. Flaherty doesn’t seem willing to do that and it’s a very strange itinerary that he has to table a budget and then run out of the country.”