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“Going forward, trade can be a powerful antidote to the effects of the oil price shock and other domestic vulnerabilities..."

March 3, 2016 – Canada must look to trade to boost future economic growth and prosperity in the face of current challenges, according to a new C.D. Howe Institute report. In “At the Global Crossroads: Canada’s Trade Priorities for 2016,” author Daniel Schwanen lays out four priorities for Canada’s trade agenda in 2016.

“Going forward, trade can be a powerful antidote to the effects of the oil price shock and other domestic vulnerabilities, such as high consumer debt, by supporting growth in incomes,” commented Schwanen. “In fact, Canada’s recent international performance helped cushion the blow to our economy from lower commodity prices and capital spending.”

The author argues for the following trade priorities in 2016:

  1. Boost market access for Canadian producers by ratifying the CETA and the TPP;
  2. Address long-standing trade issues between Canada and the United States;
  3. Secure greater market access in emerging and developing economies through trade and development agreements; and
  4. Put greater focus in our trade policy on our emerging advantage in tradable services.

The author points out that ratifying the CETA and TPP would boost Canada’s rank globally from 18th to 4th in terms of the total size of the markets our businesses have access to through high-quality agreements, beyond the WTO. Schwanen added: “This kind of access for sophisticated Canadian goods and services outweighs often over-blown concerns over intellectual property protection under these agreements.”

As Prime Minister Justin Trudeau prepares for his official visit to Washington next week, he should take the initiative between Canada and the U.S. on files where progress would benefit both countries, such as the continuation of their joint ‘Beyond the Border’ initiative, and exploration of a permanent lumber agreement.

Beyond the CETA and TPP, Canada should also aim for easier cross-border trade and investment in services with other markets whose strengths are complementary to Canada’s, such as negotiating a comprehensive bilateral economic and trade agreement with China, and completing the Canada-India negotiations towards a Comprehensive Economic Partnership Agreement.

Finally, Canada also needs to focus on new areas of comparative advantage, namely tradable services like engineering and finance, in which Canada has become a net exporter over the past 15 years.

Schwanen concluded: “Canada is a nation of traders and Canadians understand that more open trade improves their standards of living. With expanded market access come increased opportunities for growth, and also more competition, which benefits Canadians as consumers and taxpayers.”

Click here for the full report. 

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada's most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

For more information contact: Daniel Schwanen, Vice President, Research, C.D. Howe Institute; 416-865-1904, or email: kmurphy@cdhowe.org.