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Canada Must Revamp Trade and Investment Policies to Exploit Emerging Global Patterns: C.D. Howe Institute

August 2, 2012

TORONTO, Aug. 2, 2012 /CNW/ – To revitalize its flagging trade and
productivity performance, Canada should adapt its international trade
and investment policies to a world of global value chains, evolving
trade and investment patterns, and deepening economic integration;
according to a new report from the C.D. Howe Institute. In “Breaking
Free: A Post-mercantilist Trade and Productivity Agenda for Canada,”
Research Fellow Michael Hart says to be more competitive, Canada needs
to wean itself more completely from a mercantilist approach best suited
to an era in which products and firms had clear national identities,
which is rarely the case today. “Canada’s trade and investment policies
are stuck in the past. We risk being caught flat-footed and side-lined
in the highly integrated global marketplace,” says Professor Hart,
Simon Reisman Chair in Trade Policy at the Norman Paterson School of
International Affairs, Carleton University.

What’s more, Canada should not wait for a hypothetical “payoff” from
negotiations with other countries, says Professor Hart, but instead
proceed in its own interest to remove home-grown impediments to trade.
He identifies disruptive anti-dumping and countervailing duty regimes,
ineffective subsidies and procurement preferences, tariff restrictions,
including in supply-managed sectors, overabundant regulations and
remaining restrictions on foreign ownership, as areas where
liberalization should prevail. Such reforms would generate cost savings
for the government, and leave the economy more competitive and with a
stronger tax base, he says.

These reforms, according to the author, would leave Canada free to focus
on easing passage for secure trade and people at the vital Canada-US
border and aligning its regulations with the United States and other
major trading partners in areas where regulatory duplication does not
make sense. Beyond the United States, Canada should focus its
diplomatic resources on the basis of a clearly articulated business
case or foreign policy rationale. By these criteria, notes Professor
Hart, there is more potential for a useful breakthrough for Canada
across the Pacific – where there is growing demand for what Canada can
provide and where government-to-government relations “remain an
important part of enhancing economic ties” – than across the Atlantic
or in the rest of the Americas.

For the report go to: http://www.cdhowe.org/breaking-free-a-post-mercantilist-trade-and-productivity-agenda-for-canada/18501

SOURCE C.D. Howe Institute


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