Friday, February 25, 2011


Interesting artice from The Economist.

To each his own

The push for deeper ties peters out

North American integration

Feb 24th 2011
from the print edition

WHEN Canada, Mexico and the United States implemented the North American Free-Trade Agreement (NAFTA) in 1994, it was hailed as a promising first step towards the deeper integration of the continent. Six years later Vicente Fox, then Mexico’s president, called for a customs union, a common external tariff and free labour flows. And in 2005 the leaders of the three countries began a series of annual summits to push an ambitious “security and prosperity” agenda.

Since then the drive for integration has ground to a halt. The “three amigos”, as their leaders were once dubbed, could not find time to meet last year, and the session scheduled for February 26th has been cancelled. When Barack Obama and Stephen Harper, Canada’s prime minister, announced on February 4th that they were exploring ways to harmonise regulations and co-ordinate security—plans that had previously been discussed trilaterally—they did not mention Mexico.
A North American version of the European Union was always a long shot. Having one giant dealing with two relative dwarves is unlikely to produce a deal acceptable to all parties. Moreover, North America lacked the historical impetus of the second world war, which gave European integration a sense of purpose.
Related topicsStephen HarperTrade policyPolitical policyInternational relationsGovernment and politics

Nonetheless, even the modest goals set in the years following NAFTA’s passage have been blocked. One big reason is the September 11th attacks, which led the United States to redouble its border enforcement. Whereas in the 1990s Americans discussed eliminating border controls with Canada, earlier this month the United States Government Accountability Office reported that less than 1% of the country’s northern border had an “acceptable level of security”. To the south, Mexico’s raging drug war and stream of migrants make the prospect of relaxing controls there politically unthinkable. Mr Obama has struggled to fight off new restrictions, like Arizona’s harsh state law on immigration.

America’s lengthy recession also diminished the appeal of further trade liberalisation. NAFTA has always had its doubters in the Democratic Party, including Mr Obama when he was competing for its nomination. As a candidate, Mr Obama vowed to renegotiate the deal. Although he has not honoured that pledge—much to the relief of Mexico and Canada—the United States did cancel a programme allowing Mexican lorry drivers to work in America in 2009, in violation of its NAFTA obligations. Mexico retaliated with a series of tariffs aimed at the states of legislators who opposed the programme.

America is not the only country to blame. Because Mr Harper runs a minority government that could fall at any time, he has chiefly focused on short-term, voter-pleasing issues like cracking down on illegal immigration. Canada imposed new visa restrictions on Mexican visitors in 2009, angering the Mexican government.

And whereas Canadian companies once strongly backed regional integration, their focus has now shifted to Asia, turning their North American agenda almost entirely towards the United States. Mr Harper has followed suit: although he has talked of a hemispheric foreign policy and signed free-trade deals with Colombia, Panama and Peru, he is now working on aligning Canadian and American security measures and regulations.

Felipe Calderón, Mexico’s president, has espoused a vision of North America as a union of complementary economies—with Canada providing the natural resources and Mexico the labour—that would compete with Asia. However, his efforts to liberalise Mexico’s economy, including a plan to allow private investment in energy, have been defeated or watered down in Congress. It is hard to see how he can achieve continent-wide reforms.

The main obstacle to trilateral co-operation is that Canada and Mexico are much more interested in their relations with the United States than they are in each other. Until that changes, the next North American summit will probably prove just as difficult to schedule.

Thursday, February 24, 2011


This is welcome news and log overdue. Hopefully, there will be a strong immigration component for temporary entry of business persons as in otter trade agreements such as NAFTA,  the Canada- Chile Free Trade Agreement, the Canada- Peru Free Trade Agreement and the Canada-Korea Free Trade Agreement.

Canada to engage in free-trade talks with Japan

By Darah Hansen, Vancouver Sun
February 23, 2011

VANCOUVER — Japan and Canada have agreed to jointly study the potential benefits of negotiating a “broad and ambitious” free-trade agreement, federal Trade Minister Peter Van Loan announced today.

“We’ve always thought that Canada should be at the top of a Japanese free-trade agenda,” Van Loan told reporters gathered at the Vancouver Convention Centre.

Japan is the world’s third-largest economy behind the United States and China when measured by Gross Domestic Product. It’s also Canada’s largest source of job-creating investment from Asia as well as our fourth-largest merchandise export market, with exports totalling an estimated $9.2 billion in 2010.

Van Loan also noted the strong “people-to-people” ties between countries as a result of more than a century of Japanese immigration to Canada.

“Canada is proud of its partnership and friendship with the people and government of Japan,” he said.

Joining Van Loan for the announcement was Stockwell Day, Treasury Board president and Minister responsible for the Asia-Pacific Gateway and Corridor Initiative.

With a busy Burrard Inlet as a backdrop, Day said British Columbia’s ports, from Vancouver to Prince Rupert, represent a three-day advantage to Japan’s shipping companies over ports in California — a critical trade factor he hopes Japan will keep in mind.

“When those containers arrive here ... the dwell time is less than 24 hours because of the efficiency of the ports,” he said.

Existing road and rail infrastructure then allow products to move quickly across North America, reaching centres such as Chicago or Omaha in about 100 hours.

“These are huge and significant advantages that we offer through the Asia-Pacific gateway,” he said.

Day said B.C.’s forestry, manufacturing and agricultural industries also stand to gain from a trade deal with Japan.

“What it means at the end of the day, bottom line, is more jobs, more economic prosperity for Canada if we succeed,” said Van Loan.

Today’s announcement marks the first step in what could be a lengthy negotiation process with Japan, traditionally one of the more isolationist economies.

“These things don’t happen overnight,” Van Loan said.

But Yuen Pau Woo, head of the Asia Pacific Foundation of Canada, said the significance of Japan’s willingness to talk shouldn’t be underestimated.

An agreement between the two countries would send a strong signal to the rest of Asia that Canada is willing to forge more deals, he said, adding, “This is the beginning of a trend for trade arrangements with Asia and a deeper commercial engagement between Canadian and Asia.”

Since 20006, the Harper government has signed free-trade deals with eight countries, including Colombia, Jordan, Panama, Peru and the European Free Trade Association states of Iceland, Liechtenstein, Norway and Switzerland.

The government is also pursuing negotiations with some 50 other countries.

Van Loan said an initial study between Canada and the European Union showed a potential $12-billion annual benefit to the Canadian economy, while a deal with India would bring in an estimated $6 to $15 billion a year.

“You’re talking very significant job benefits, very significant job growth,” he said.

Van Loan said any new trade deals are unlikely to change Canada’s relationship with the U.S., which remains our principal trading partner.

But Day said opening trade doors with other nations will give Canada an advantage should the U.S. market weaken.

“The fact that we have been able to expand opportunities into other markets gives us a greater sense of comfort and also capability,” he said.