OTTAWA — There are a few nagging sore points in Canada’s trade relations with the rest of the world.
Topping the triage list for Chrystia Freeland, our international trade minister who is in Tokyo this week, is a perceived growth in protectionism that could scuttle, or at least slow, the implementation of major trade deals including the 12-nation Trans-Pacific Partnership.
In addition to the long-negotiated, yet-to-be-ratified TPP — agreed to Oct. 5, 2015 and signed Feb. 4 of this year — the Brexit referendum raises the possibility that the U.K. may break away from the European Union, complicating our trade relations with the bloc. Should the U.K. vote to separate, Canada’s free-trade pact with the EU could face a major re-write.
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“We are a trading nation,” Freeland said Tuesday during an interview with Bloomberg News in Tokyo.
“We really understand the importance of Canada being plugged into the global economy, and we are concerned by the rising waves of protectionism we see around the world.”
The minister would not identify which countries were of most concern to Canada regarding protectionism, nor would she discuss the possibility that the U.S. could decide not to ratify the TPP — depending who wins the presidential election on Nov. 8.
Freeland is in Japan this week — along with Prime Minister Justin Trudeau — ahead of a summit of G7 industrialized nations, which begins on Thursday.
Both Trudeau and Freeland have already met with company executives of Toyota Motor Corp. and Honda Motors Co. Ltd, which have assembly plants in Canada.
The trade minister said talks with those automakers focused on opportunities to expand their operations in Canada. Japan — like this country — also has yet to ratify the TPP agreement. Freeland said the countries that agreed to join TPP have two years to ratify it.
“Our government believes that the way you push back against (protection sentiment), and the way you maintain what I think we have in Canada — which is a real consensus still for an open economy and an open society — is to make sure people are heard,” she said. “So we really feel our process is essential.”
Canada has yet to set a date for sealing the deal. Freeland told Bloomberg that “countries are taking their time.”
Trudeau, speaking to reporters Tuesday, said: “I am, personally, extremely pro-trade and we are consulting widely on that specific deal (TPP).”
Meanwhile, Canada has urged U.K. citizens not to break away from the European Union in the June 23 referendum.
Trudeau has stated the comprehensive trade pact with the EU is “a great deal for both sides,” while Freeland has maintained the U.K. is “not going to get a better deal.”
Trade experts have also warned that a vote for Brexit would leave the U.K. out of the Canada-EU agreement, with few guarantees the country could negotiate better separate deals with its current trading partners in Europe.
Canada and the U.S. would have no choice but to also attempt to reach side trade agreements with the U.K., something that is unlikely to happen quickly, given the current protectionist attitudes seen internationally and the cautious attitude other countries are likely have about a stand-alone U.K. economy.
“Canada has long had and will continue to have, a strong relationship with a strong Britain and a strong relationship with a strong Europe,” Freeland said in a statement to the Financial Post. “But we also believe that Britain is stronger in Europe and that Europe is stronger with a strong Britain as a member.”
Just last month, U.S. President Barack Obama waded into the global Brexit debate during a visit to London, saying “it’s fair to say that maybe at some point down the line there might be a U.K.-U.S. trade agreement, but it’s not going to happen any time soon because our focus is in negotiating with a big bloc, the European Union, to get a trade agreement done.”
“And the U.K. is going to be in the back of the queue.”