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Conservative leader Stephen Harper and his wife Laureen walk across the docks to a campaign stop in Halifax on Thursday, March 31, 2011. (Adrian Wyld/ADRIAN WYLD/THE CANADIAN PRESS)
Conservative leader Stephen Harper and his wife Laureen walk across the docks to a campaign stop in Halifax on Thursday, March 31, 2011. (Adrian Wyld/ADRIAN WYLD/THE CANADIAN PRESS)

Economy Lab

Harper talks trade, but it this just an outreach exercise? Add to ...

The news that Conservative leader Stephen Harper is touting the importance of concluding trade agreements with the European Union and India is, by and large, good news.



It's good because ever since the epic free-trade election of 1988, it has been unusual for politicians to speak out in favour of liberalizing trade during an election campaign. The "trade" issue in recent elections has consisted mainly of all the parties falling over each other to promise not to do anything that would have the slightest impact on our protectionist policies in the dairy and poultry sectors.

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However, it leaves open a key question.



Why for instance is there no mention of the negotiations with South Korea, which are much closer to completion than those with the EU and India? Is this really part of the "strong and ambitious Free Trade Agreement agenda" that Mr. Harper set out last November in Seoul?





The problem is that politicians have real difficulty grasping that trade is not just about exports but about making sure that Canadian businesses can benefit from the modern global economy. Being part of global supply chains means business needs imports as well. Business also needs agreements that deal with all aspects of the 21st century global business environment, including trade in services, investment, intellectual property, and trade in goods.



In short, Canada needs a government with a strategic trade policy developed with an understanding of the role of trade in our economy and built with agreements that will strengthen our economic performance. That is what leaders should be explaining to Canadians during an election campaign.



Too often, trade policy is only looked at as "export policy". Negotiations are launched to broad applause in the expectation that they will yield positive results for constituents. As the negotiations progress, it becomes clear that in some sectors difficult adjustments may be necessary to adjust to new conditions of competition. Some constituents object and the politicians become skittish.



With the WTO negotiations in serious trouble, Canada has no choice but to go forward with a "strong and ambitious Free Trade Agreement agenda". Canada has promoted bilateral free-trade agreements, and now other major countries are busy at the game. Even the Obama administration is now embracing the need for to implement its agreement with South Korea and other countries.



While the nearly completed Canada-Korea agreement will pose some challenges for the automobile industry, it will offer significant benefits for other Canadian producers. And failure to act will put many other Canadians in the same situation as the pork producers - in serious danger of being completely shut out of the lucrative Korean market by competitors from the U.S. and the EU who enjoy free-trade access. Difficult choices need to be made and even inaction can be a damaging choice for some. Such choices will alienate some voters and are not the stuff of which election campaigns are made.



The really troubling part is that probably no party is interested in talking seriously about these matters during an election campaign. Now, was Mr Harper's statement on India and the EU really about trade or was it about reaching out to ethnic communities in Canada? How many Canadians are there of South Korean origin?



Let's just hope Canadian trade policy survives the election. Maybe we will be better off if they don't talk about trade.





John Weekes, a senior business adviser at Bennett Jones LLP, was Canada's ambassador to the WTO and chief negotiator for the NAFTA



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