The Globe and Mail
October 13, 2015
That trade, this time in the form of the recently negotiated Trans-Pacific Partnership (TPP), is once again an election issue should come as no surprise.
The tariff was a staple election issue after Confederation. Confederation itself was in part a defensive reaction to the U.S. abrogation of the Canada-U.S. reciprocity agreement. An integral part of Sir John A. Macdonald’s National Policy was a high tariff to protect Canadian manufacturing interests.
The dispute between Liberal free traders and Conservative protectionists culminated in the 1911 “reciprocity” election. A political cartoon from that era captures the mood. Captioned “The Way He Would Like it – Canada For Sale,” it features a grasping Uncle Sam exchanging a bag of money for a bowed and bound Miss Canada.
The dispute over tariff levels contributed to the rise of Prairie populism and the Progressive movement in the 1920s. Progressives eventually joined the Liberals, Conservatives and the Co-operative Commonwealth Federation (that, in 1961 morphed into the NDP). The Progressives also gave the Progressive Conservatives their antecedent, the national party name from 1942-2003.
Trade continued to feature in elections after the Second World War. It was the overarching theme of the1988 election. By then, however, party positions were reversed. Liberal Leader John Turner and NDP Leader Ed Broadbent opposed the Canada-U.S. free trade agreement (FTA) negotiated by Progressive Conservative Leader Brian Mulroney, who had once ridiculed free trade. The impassioned, televised debate between Messieurs Turner and Mulroney is an election classic.
Continental trade was an issue in 1993 when Canadians elected Liberal Jean Chrétien. Subsequent side agreements on labour and the environment secured the North American free-trade agreement (NAFTA). Despite some rocky years of adjustment, the Canadian economy boomed ahead during the nineties on the back of the improved continental access and our integration into global value chains.
The real success of the FTA and NAFTA was the confidence it gave Canadians to compete internationally. If most premiers opposed freer trade in 1988, today it is the premiers who are the most active salesmen and advocates for freer trade.
Always a trading nation, we have become a nation of traders. Canada draws most of its annual income from trade.
Yet fears about trade persist.
NDP Leader Tom Mulcair’s opposition to the TPP is a key theme in his party’s campaign and he has seized on Hillary Clinton’s opposition to bolster his arguments.
Successive U.S. administrations have done a poor job promoting the benefits of trade. While most Americans think the TPP a “good thing”, support is lower than in Canada and Mexico. Having 2016 presidential contender Ms. Clinton, one of the architects of the U.S. pivot to the Pacific, oppose the TPP undermines public confidence in freer trade.
Unifor, the union representing 40,000 Canadian auto workers, claims that the TPP will result in a loss of 20,000 auto jobs.
Similar fears were voiced by unions after the signature of the Auto Pact in 1965 and the FTA. In each case, employment subsequently rose. While employment in the auto sector is down significantly from its post-FTA/NAFTA highs, industry employment has posted small gains in recent years.
Adjustment assistance is essential to assuaging public fears on freer trade. The Harper government has promised funds to the auto and dairy industry in the wake of TPP.
Look to the example of Canada’s vintners. Before the FTA, Canadian Baby Duck was the preferred choice of teeny-boppers and, apocryphally, used to dissolve paint. With adjustment assistance, vines were replaced, equipment modernized and skills and training instituted. Today, Canadian wine is sold to 40 nations.
Governments and business need to do a better job of explaining the benefits of trade. If all politics is local so is trade. Businesses should tell employees how much of their salaries depend on trade.
Stephen Harper points with pride to the agreements concluded since 2006 with 39 countries. The TPP adds or updates 11 more. Meanwhile our market share of global trade continues to decline – “the second largest in the G20” observed the then senior deputy governor of the Bank of Canada.
Finding markets for our goods and services is even more important than negotiating the trade deals.
One of the most successful initiatives of the Chrétien government was the series of Team Canada missions that included premiers and the private sector. Governor-General David Johnston markets Canadian services, especially education, during his travels.
Debating trade during elections is a long and honourable Canadian habit, even if party consistency is not. Our next government needs to make explaining trade to Canadians a permanent campaign.