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Canada’s prosperity hinges on inclusive trade, says new research

Need trade policies that ensure that more Canadians share in the benefits of globalization and technological progress


May 17, 2017
by

Montreal, Quebec – Canada must develop trade policies that ensure that more Canadians share in the benefits of globalization and technological progress, says Redesigning Canadian Trade Policies for New Global Realities. Edited by Stephen Tapp, Ari Van Assche and Robert Wolfe, and published by the Institute for Research on Public Policy (IRPP), it is based on extensive research and sets out a forward-looking policy agenda for more inclusive trade.

With the focus on the impending renegotiation of NAFTA, Canada now stands at a critical crossroads. Our economic prosperity depends on international trade and investment, but new global realities – including rising anti-trade sentiments – are calling into question long-standing policy goals and approaches.

“If Canadians believe that the benefits will be too narrowly concentrated at the top, then any attempt  to promote economic prosperity through trade integration will face resistance. A more inclusive trade agenda is an essential component of broader efforts to deliver more inclusive economic growth and maintain public support for trade,” says Stephen Tapp, co-editor of the volume.

The volume’s editors say that governments need to better protect workers whose jobs are negatively affected by economic dislocation —whether or not it is trade related — by focusing on skills development and retraining. They also call for a renewed, evidence-based approach to trade policy that does the following:

  • Facilitates resource reallocation: Allowing capital and labour to flow flexibly and quickly to their best uses in response to changing global economic circumstances is the key to unlocking new trade growth and productivity.
  • Promotes international connectivity: Canadian firms and workers must be able to  engage effectively with foreign partners and markets. The productivity of our firms and workers increasingly depends on their networks and their ability to collaborate with partners, regardless of location.
  • Builds a better, rules-based global trading system: Canada should play a leading role in working with other countries to achieve this objective. This is the best way to guard against uncertainties in trade, to deepen Canada’s links with fast-rising emerging markets, and to further diversify its trade and investment.

“Given the global nature of production, trade and investment, Canada’s interests ultimately lie in a transparent, inclusive and global system for trade and investment. We should be thinking multilateral first in our trade policy,” says co-editor Robert Wolfe.

Redesigning Canadian Trade Policies for New Global Realities, edited by Stephen Tapp, Ari Van Assche and Robert Wolfe, is the sixth volume in IRPP’s The Art of the State series. It brings together the contributions of over 30 experts from eight different countries to analyze how structural changes and emerging trends in international commerce, technology and economic power are affecting Canada, and what these changes mean for public policy.