Canada and International Trade

canada 2“Sharing is caring.” This is what my dad tells me every time I bring home some Chipotle, and what I say when he gets his coffee from Starbucks. In a way, my dad and I are trading partners. I am Canada and he, being a new resident of Los Angeles, is the United States. We are partners in crime – and justice – and because of our proximity, share everything; but the United States isn’t Canada’s only trading partner. Canada has the second-highest trading level in the G7, after Germany, accounting for more than 65% of its GDP.  Famous for their caring and polite nature as well as for their disposition to share, Canadians unsurprisingly chose to make trading one of their most prevalent industries.

Being part of the British Commonwealth has always had its perks: in the early days of Canadian history, the United Kingdom used to be Canada’s largest trading partner. Nowadays, England is akin to an “ex-boyfriend” of Canada’s; although their trading relationship belongs to the past, they occasionally keep in touch to exchange friendly small-talk.

The “daddy” of Canada’s massive trading industry, the United States, was a gradual association. What began as a simple trifle with trade grew into a multi-trillion-dollar business with the help of Canada’s southern-neighbours. In 1994, Canada, the U.S, and Mexico signed the North American Free Trade Agreement (NAFTA), the largest free trade agreement in the world. Exempt from high taxation, imports and exports’ exchange for each participating country is exceptionally facilitated. Today, NAFTA is valued at a whopping 20 trillion-dollars. As a father, the U.S has raised Canada’s trade to a soaring level compared with when they first began in earlier days.

After NAFTA, the second most important agreement is the one with Canada’s current “boyfriend”: the European Union. Following a series of dates – nothing too serious – , Canada and the European Union both recently felt it was time to take their relationship to a more serious level. In 2014, a proposed trade agreement that would remove 98% of all tariffs on goods travelling between Canada and the EU was approved by both the Council of the European Union and European Parliament; however, the Comprehensive Economic and Trade Agreement (CETA) has been the target of a heated debate among Canadians. A majority feel that this pact will be taking the relationship too far, arguing that free trade would open the gates for an unfair influence to be exercised by European Corporations on Canadian services, jobs, as well as on its environment. Although nothing has been settled yet, there will come a time when Canada must decide on where her heart lies.

While pursuing these various metaphorical relationships, Canada is also thinking about adopting a child. The Trans Pacific Partnership (TPP) involves twelve Pacific Rim countries and, if signed, will be the largest international trade agreement since NAFTA. All twelve participating countries constitute 40% of the global GDP. To encompass reducing tariffs and boosting economies in hopes to strengthen economic ties is the TTP’s main project. Nevertheless, environmental groups and labour unions are its fierce opponents, citing irreconcilable differences. Jokes set aside, Canadians claim that jobs would be outsourced and  that a potential rise in national GDP would inevitably be accompanied by a rise in unemployment. Adopting the TTP would be a very important commitment, and just like with the CETA, Canadians are wary about signing the final papers.

My conclusion from these observations is that Canada’s trading family closely resembles an Italian family: despite occasional disputes, there are so many relatives that one can always be assured some are bound to attend one’s wedding. An active partaker in 40 free trade agreements internationally, Canada really is part of a complex network comparable to a family; but instead of members sending money exclusively on birthdays, they send it every day.

by Luise S.