Election Anniversary: Justin Trudeau’s Three Gears on Trade

Editor’s Note: This week, Ensight is publishing a series of original content articles looking back on the Liberal government’s first year in power and ahead to the rest of its mandate.

Today, Ensight Director and Trade Practice Lead, Adam Taylor looks at the various layers of the Liberal government’s approach to trade policy and free-trade deals, specifically TPP, CETA, and expectations around a deal with China. 

By: Adam Taylor 

During the federal election campaign of last year, international trade was thrust into the spotlight (sort of) when then-Prime Minister Harper announced that negotiations had concluded on the massive Trans-Pacific Partnership.  The Liberal Party walked a fine line neither supporting it like the Tories nor outright opposing like the New Democrats.  Now a year later, we can take a wider measure of how the new government will approach trade issues – especially as these issues are now literally front and centre in politics south of the border and across the Atlantic.

Neutral on TPP

While being careful not to oppose the TPP outright (as Donald Trump and Hillary Clinton have done), the Liberal position is more nuanced. They support deepening Canada’s trade footprint in Asia, they agree broadly with the negotiated outcomes but aren’t yet ready to sell the deal. Canada’s Trade Minister Chrystia Freeland said explicitly this isn’t her job. Against the backdrop of vehement opposition to TPP playing out in presidential politics, it’s a sound strategic holding pattern.  After all, why sell Harper’s deal and be stuck with it (good and bad) if it’s going to fail in the U.S. and end up going nowhere anyway?  A wait-and-see approach is a pretty safe bet these days, especially until we know who will occupy the White House.

Second gear on trade with China

While the Trudeau Liberals inherited the CETA and TPP deals from the previous government, a reboot of the Canada-China relationship is very much in Justin Trudeau’s wheelhouse.  The previous government was criticized for its scattered positions on China. Like the jerky driver whose foot is constantly shifting from the gas to the brake, the result is and was the farthest thing from a smooth ride. Yet under PM Justin Trudeau, a steady, smooth way forward appears to be the objective and so far so good.  Official engagement at the highest levels is happening regularly, exploratory talks toward a full blown free trade agreement have been launched and there’s clearly positive momentum in the wider relationship for the first time in many years.  While the relationship won’t go to fifth gear anytime soon – there are far too many legitimate barriers for that – a stable march forward is a good thing for Canadian businesses looking to deepen  their footprint in what will soon be the world’s largest economy. 

Fifth gear forward on CETA

Under Justin Trudeau’s leadership, Canada is full steam ahead in trying to get the Canada-EU Comprehensive Economic and Trade Agreement (CETA) signed and brought into force. Trade Minister Freeland is literally working around the clock to bring reluctant EU countries like Belgium onside so that leaders can officially sign the documents that will bring the agreement one step closer to becoming the law of the land. Put simply, the Trudeau government is doing all it can to save CETA.  They’ve renegotiated controversial chapters (investor dispute provisions); they’ve signed new accompanying declarations affirming its “progressive” nature; and they’ve appointed a new CETA Emissary (former trade minister Pierre Pettigrew) to literally work the rooms in Brussels and beyond. In less than a week we’ll know where this historic agreement stands against the forces of protectionism which have now officially landed on both sides of the Atlantic.