Canadian Manufacturing

Growing U.S. protectionism threatens Canadian prosperity, report says

Former Statistics Canada chief economic analyst says Canada should resist any temptation to beat a similar retreat to within its own borders



The Ambassador Bridge, which connect Detroit, Mich. and Windsor, Ont. The route is one of the most important shipping arteries in North America. PHOTO: Starley, via Wikimedia Commons

Philip Cross said rising protectionist rhetoric, particularly in the U.S. election could generate trade issues between Canada and its most important export market. PHOTO: Starley, via Wikimedia Commons

VANCOUVER—The former chief economic analyst with Statistics Canada, says rising global protectionist sentiment—particularly the anti-trade rhetoric on display in the U.S. election campaign—threatens Canada’s future economic prosperity.

Authoring a Fraser Institute study, Philip Cross said the issue is on full display with American presidential candidates Donald Trump and Hillary Clinton, but that the backlash against free trade is clear in many other regions as well.

“There is growing opposition to the nearly four decades-long consensus regarding the benefits of trade,” Cross said in the report. He pointed to the unratified 12-nation Trans-Pacific Partnership, demonstrations in Europe and a recent Belgian government move to quash the Canada-European Union Trade Agreement (CETA).

In the U.S., Trump has threatened to tear up the North American Free Trade Agreement (NAFTA) entirely, while Clinton has said she would review the terms of two-decade old trade deal.


Related: Canada prepares to get dragged into U.S. election as Trump launches opening salvo
“Canada is a trading nation and a significant portion of the country’s prosperity is tied to our ability to trade with other countries,” Cross said.

The report notes exports accounted for 31.5 per cent of the Canadian economy in 2015, up from 25 per cent nearly three decades ago, before any free trade agreements had been signed. Unsurprisingly, the U.S. is still Canada’s largest trading partner, with some three-quarters of exports heading south of the border.

“Too many Canadians take for granted the economic benefits that freer trade has provided, until protectionist threats remind us how much we have to lose,” Cross said.

Throughout the report, Cross argues Canada should resist any temptation to withdraw to within its own borders.

So far, the year-old federal government has readily endorsed this open-market approach. In China last month, Prime Minister Justin Trudeau urged other world leaders to resist rising anti-trade sentiment while saying there are few risks of the attitude becoming pervasive within Canada.

You can access the full report here.

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