Canada should prioritize joining Biden’s Indo-Pacific trade deal

When US President Joe Biden launched the Indo-Pacific Economic Framework (IPEF) in May, many were surprised that Canada was not among the founding members of the economic pact. Canada, like the United States, is a Pacific nation with strategic interests in the region. Ottawa and Washington are committed to working together to strengthen rules-based global trade.

The federal government played down Canada’s absence, saying we already have a regional trade deal – the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) – and are negotiating bilateral agreements with other Pacific nations. But it is hoped that the government will reconsider its position and that Canada will formally sign on to join this new US-led initiative.

It would be a positive development. Given the growing interdependence between the US and Canadian economies, our country must seize the opportunity to help shape the changing global trade landscape. If Canada is serious about prioritizing the Indo-Pacific region, it is clearly in our interest to participate in as many regional initiatives as possible to expand the country’s reach in the region.

It is true that IPEF is not perfect. By the Biden administration’s own admission, this is still a work in progress. Above all, Canada should be involved from the start to help shape it. Above all, the agreement aims to improve trade facilitation, supply chain resilience, advances in digital trade and environmental standards, all of which are Canadian priorities.

Of course, the IPEF offers advantages to the CPTPP, but this agreement is not a/or a proposal. Canada could be one of the two, as could Australia, Brunei, Japan, Malaysia, New Zealand, Singapore and Vietnam. Joining IPEF will strengthen our relationships with other Pacific countries that are not members of the CPTPP: India, Indonesia, Korea, the Philippines, Thailand and yes, the United States.

I am currently in India following the release of a joint report by the Canadian Business Council and the Canada-India Business Council. My meetings with public and private sector leaders reinforced my belief that Canada needs to be more active in regional forums if it is to be taken seriously.

I felt the same after traveling to South Korea earlier this year. I have heard government officials and business leaders complaining about Canada’s lack of involvement in the Indo-Pacific and wondering why we are not on a list of state-backed regional arrangements. including the IPEF, the Quadrilateral Security Dialogue and the AUKUS Trilateral Security Agreement.

Prime Minister Justin Trudeau has hinted that the Biden administration would not need the IPEF if the United States were part of the CPTPP. But given the current political climate in the United States, everyone agrees that it is highly unlikely, if not unlikely, that the United States will join the CPTPP. Mr. Biden, despite being an early supporter of the Trans-Pacific Partnership, as mentioned earlier, shows no signs of reversing his predecessor’s decision to leave.

The CPTPP outlines why Canada should join the IPEF. Canada was not initially part of the TPP, which is Barack Obama’s mainstay for the Pacific. When Donald Trump pulled out of the talks, Canada and other TPP countries reneged on the deal. This would not have happened if the United States had not used its power to bring these countries to the brink of a turning point.

It should be recalled that Canada’s initial reluctance to join the TPP was based on the fact that we already had a “gold standard” trade agreement with the United States, the North American Free Trade Agreement and bilaterals that we were negotiating. with other Pacific countries. This argument does not apply to TPP and may not apply to IPEF.

Critics draw the wrong lesson from the TPP. They worry that Washington’s interest in IPEF will wane after the US midterm or 2024 presidential election. But it proves that the TPP’s experience shows we can salvage something more useful. In fact, we don’t know what the future holds, except that Canada won’t be at the table when IPEF ministers meet next month.

At the end of the day, that’s the biggest risk — by leaving Canada out, our closest economic partners are negotiating new trade standards and we’ll have to comply with new regional obligations, but we’ll get through it. Do not say. It’s important to us to stay aligned with the United States in the future of international trade, and that means being part of IPEF.

Goldie Hyder is President and CEO of the Business Council of Canada

Your time is very valuable. Easily get top business headlines delivered to your inbox morning or night. register today.

Lonnie Kimmons

"Internet fanatic. Evil organizer. Tv fanatic. Explorer. Hipster-friendly social media junkie. Certified food expert."

Leave a Reply

Your email address will not be published. Required fields are marked *