… Jim Balsilie is a much smarter man than I so I think we should consider his opinion which he offers in the Globe and Mail. “The Trans-Pacific Partnership (TPP) trade deal roared back into the headlines earlier this month,” he says, “with Prime Minister Justin Trudeau being accused of scuttling a deal brokered at the Asia-Pacific Economic Co-operation forum in Vietnam … [but] … Less attention was given to International Trade Minister François-Philippe Champagne and his team, which succeeded in sending the original TPP12 automotive and cultural sections back to the negotiating table and in suspending many of its controversial intellectual-property (IP) provisions. Without these steps, our economy could have been substantially and permanently damaged … [because] … By designing a trade strategy that benefits Canada’s current and future wealth drivers, Canadian negotiators focused on securing market access for traditional businesses and policy flexibility for our digital businesses to create new markets. This outcome is all the more significant because it was done against the backdrop of foreign corporate interests in Canada that dominate face time with our government, and also influence Canadian business associations … [and] … The original TPP12 was excessive in ways that no previous economic partnership ever contemplated. A sweeping, constitution-style document, it dramatically raised IP owners’ protections beyond global standards. It extended and enforced the U.S. IP regime and interests into all TPP12 countries and provided unprecedented, aggressive and permanent advantages to current large holders of IP, who are predominantly American.” Fair points, I think.
“TPP12 received widespread criticism from innovation experts around the world,” Mr Balsilie says, “who argued the deal presented the opposite of a flexible IP regime needed to allow new innovators to emerge. Nobel laureate Paul Krugman opposed the way in which TPP12 strengthened IP monopolies and dispute-settlement mechanisms. Médecins sans frontières (Doctors Without Borders) condemned the effects that extended IP standards would have on access to medicines for the world’s most vulnerable. Another Nobel laureate and pioneer of innovation economics, Joseph Stiglitz, called it “the worst trade deal ever.” Innovation and digital policy experts similarly warned it would make Canada a permanent underclass in the global knowledge economy … [but] … By contrast, a parade of U.S. lobbyists and Canadian business associations urged the Canadian government to join TPP12 in earnest. Some business leaders publicly called for Canada’s commitment to TPP12 without analysis to show its costs to our economy. Instead, they made dubious claims that it would open up markets for Canadian entrepreneurs to 800 million new customers … [but, again] … Predictably, TPP12 economic studies showed a trivial 0.07-per-cent gain from new Canadian exports over the next 18 years because most tariff barriers have already been removed by long-standing WTO commitments or existing Canadian trade agreements with TPP countries. The Canadian government’s own trade modellers expressly stated that their TPP12 studies did not account for the agreement’s adverse effects on our innovation economy … [and] … Modern trade deals are “Asset Valuation Protection Agreements” for the global knowledge-based economy and only minimally deal with open-border issues. They entrench structural inequalities between owners of IP and their buyers, because this is where the money lies in the 21st century.“
He goes on to discuss the ins and outs of intellectual property and the knowledge based economy ~ a subject in which he has real, practical experience as a leader ~ and I am happy to agree that “International Trade Minister François-Philippe Champagne and his team” have done good work for Canada in making sure that TPP12 is better than the original. But technology is not the only issue at stake and Canada is not a technological powerhouse and I remain convinced that Prime Minister Trudeau displayed incredibly poor manners and may have ended up doing more harm than Minister Champagne did good.
Mr Balsilie is, I note, part of the prime minister’s delegation in China. That’s probably a good thing as there is a huge potential market for information technology there, but the Chinese have a certain reputation for seeking shortcuts, shall we say, in their race to acquire technology and Canadian officials have publicly warned about security risks in a trade deal with China.
In the end international trade deals are still deals and in every deal there are trade-offs: we give something to get something else. Perhaps Minister Champagne got something for us in Asia a few weeks ago … perhaps Prime Minister Trudeau cost us something; time will tell.
Being seen to be negotiating free(er) trade with China is an important part of our NAFTA negotiations with the USA … Prime Minister Trudeau and his advisors certainly know that Xi Jinping will display good manners towards the Canadian delegation and he will expect the same in return.
It is no secret that I am a committed, even an ardent free trader … I favour free(er) trade with all who are willing to work within the framework of a rules based system and, in my opinion, that includes China. I have no special brief for China, but, unlike some, I have nothing against China either. We trade, more or less freely with a number of countries that have deplorable human rights records and that, routinely, trample on their own laws. China is far from being the worst of our trading partners.
We and China have a lot to offer one another … and until America comes to its political senses, which may be a year or, perhaps, a decade or even a generation from now, China looks better and better as a trading partner. I want Team Trudeau to do a good deal with China and, as Mr Balsilie suggests, a good deal is one that benefits Canadians … but, at bottom, it is still a deal and that means there is give and take by both sides, and, when dealing with China, there will be no room for virtue signalling … not if we really want a deal.