Free Trade Agreements In Canada

After years of negotiations, Canada has landed a deal with the Trans-Pacific Partnership (TPP) – the world’s largest free trade agreement in history – sweeping a deal that will open vast economic opportunities in Asia-Pacific and the Americas. With minimal costs, Canada will significantly benefit from the TPP with lower costs for consumers, a boost to gross domestic product (GDP) and lower trade barriers such as tariffs for exporters. TPP’s skeptics are many of the same people who criticized the North American Free Trade Agreement and Canadian-European Union Free Trade Agreement for very similar reasons. This landmark free trade agreement includes 12 countries (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore,

That means Canada’s economy is dependent on foreign markets to export and import goods and services. Therefore free trade agreements that remove tariffs, restrictions and other technical barriers imposed by governments benefit Canada’s economy. It is irresponsible for any government, especially Canada to forgo such historic trade negotiations such as the Trans-Pacific Partnership. Moreover, parliament ultimately has to judge the merits of this agreement and ratify it. The newly elected Liberal government has stated that they are pro-trade and will most likely consider this a good deal for Canada. Dan Ciuriak, a former deputy chief economist at the federal Trade Department, has estimated that the TPP will boost Canada’s economy by 0.1 per cent, while staying out would have cost it 0.05 per cent of GDP. After a series of quick quantitative calculations, University of California-Berkeley economist Brad DeLong estimates that the TPP would increase the world’s wealth by a total of $3 trillion. Though that is not a big deal in the grand scheme of things, it is a good deal in times when the global political and economic environment is increasingly polarized. There are strategic reasons for Canada to also sign this deal. If the Trans-Pacific Partnership did not get the approval of the 12 countries, it is possible an alternative deal would have arisen on Chinese terms without the participation of Western states. Political scientist Paul Poast of Rutgers University confirms this theory through his research. Trade deals provide the right tools to create and solidify alliances, especially with “buffer states” that may face a threat from a powerful neighbour. Dr. Poast says that, “buffer states in alliances with trade provisions experience fewer opportunistic violations of the alliance terms, avoid occupation and invasion at a higher