On the eve of the G-20 summit in Toronto this weekend, the Conference Board of Canada wants global leaders to know that integrated trade policies could boost the global economic recovery.
Although international supply chains inadvertently pulled Canada and other nations deeper into recession, Danielle Goldfarb believes they could also limit the scope of protectionist responses hindering trade.
“The highly integrated nature of global production makes it unattractive for governments to impose new trade barriers that affect not only the flow of final goods, but also … all of the related intermediate inputs and components,” said Goldfarb, an associate director of the International Trade and Investment Centre. “In short, tight global linkages may have blunted the protectionist response.”
Free trade policies make it easier for many Canadian mining companies, most of which are based in Vancouver, to do business abroad (See “Canada closer to inking free trade deal with Peru” – issue 968, May 13-19, 2008).
Goldfarb’s comments were related to a Conference Board report that is part of an ongoing series outlining lessons from the recession.
The report, Integrative Trade can Pull us Down and Up, said many G-20 leaders publicly avoided protectionist policies during the recession.
Yet political realities allowed some protectionism to slip through, such as Buy American policies in the U.S.
The Conference Board believes Canada and other world economies need to commit to integrative trade policies that remove existing barriers to trade, investment, goods, services, imports and exports.
Federal Minister of International Trade Peter Van Loan recently touted the success of Canada’s free trade agreement with the U.S.
Van Loan said: “Canada believes that lasting economic recovery – not just in North America, but around the world – depends on free trade, not protectionism.”
He also said the advantages of free trade policies versus protectionism would be one of Canada’s key messages at the G-20 meeting.