Canada’s progressive trade agenda starts in Africa.
The Hill Times.
Economic growth in the developed world has essentially flat-lined. The country’s economic future is in the developing world.
The arrival of president-elect Donald Trump threw the Liberal government’s trade strategy off balance. The recent reshuffling of cabinet and the now laser-like focus on the United States, Canada’s most important commercial relationship, confirmed the need for a reboot.
The first casualty of the change in strategy is likely the government’s “progressive trade agenda,” particularly with respect to the developing world. As newly confirmed Trade Minister François-Philippe Champagne considers his options, Africa is the best rationale to keep this agenda on his priority list.
The continent’s GDP has now surpassed the US$3-trillion mark. Its population has reached one billion and is expected to surpass two billion in the next 30 years. By that time, Africa’s population is expected to be larger than China and India’s combined.
The middle class in Africa now represents almost a third of Africa’s current population and is growing. According to a recent McKinsey report, Africa’s strong household consumption and business spending will offer companies US$5.6-trillion in opportunities by 2025.
African countries are taking positive steps toward improved industrial development and structural change. Trade is essential to this effort. Intra-African trade is already significantly more diversified than continental trade with the rest of the world, according to research carried out by the African Trade Policy Centre of the UN Economic Commission for Africa.
Poverty remains the main challenge for Africa. The Millennium Development Goal of halving poverty was met for all developing regions except Africa. The World Bank Group estimates that even though the share of extremely poor Africans declined from 57 per cent in 1990 to 43 percent in 2012, the number increased by more than 100 million. It also projects that the world’s extreme poor will be increasingly concentrated in Africa.
A focus on traditional markets for Canadian goods and services is not an effective long-term strategy. Economic growth in the developed world has essentially flat-lined. This has become the new normal. Canada’s economic future is in the developing world.
This is where the mandates of Trade Minister Champagne and International Development Minister Marie-Claude Bibeau intersect.
Africa represents the largest share of Canadian international development assistance. Under the umbrella of sustainable economic growth—the overarching theme of a progressive trade agenda—Canada has made significant investments in the development of small- and medium-sized enterprises, governance, greater and more inclusive public participation, women’s empowerment, and the environment.
Canada is already at the forefront of Africa’s trade and development agenda. Canada is working with the UN Economic Commission for Africa to support African efforts for a continental free trade area that would eliminate tariffs, streamline border-related issues, address non-tariff barriers, and achieve common rules on investment and services.
This is the best entry point for Canada for further engagement. The issue is how Canada will use this opportunity. According to OECD data, Canada’s contributions to aid-for-trade initiatives is declining, as its commitment to official development assistance also declines.
Africa has a Brexit challenge: the United Kingdom and Europe will be consumed for years with redefining all aspects of their relationship. Trade and investment relations with Africa are way down the list of priorities.
Canada should fill this engagement vacuum through the Commonwealth and la Francophonie. A comprehensive trade and development strategy with these members, launched at a WTO Ministerial in December, would provide a blueprint.
A services trade and investment focus should be emphasized. Tertiary education, clean energy development, technological co-operation on climate change mitigation strategies, and agricultural productivity services improvements are all priority areas for expansion in Africa. These priorities also address directly Canadian goals for improved women’s empowerment, increased inclusive growth, and more broadly based support for development.
Canada’s co-operation model with mining companies for improved corporate social responsibility provides lessons for deeper engagement in Africa. Lessons learned, both good and bad, can help develop new bilateral trade and investment relationships.
We also need a change in perspective. The criticism of the limits of globalization in addressing social and other developmental objectives is leading to a “Made in Canada” approach for goods and services. The reality is that we have mutual interests in creating value together, across national borders. A “Made WITH Canada” trade and development niche strategy based on sound business and development principles and some connection support from Canada is, in our mind, the only way to go.
David Luke is co-ordinator of the Africa Trade Policy Centre at the UN Economic Commission for Africa in Addis Ababa, Ethiopia. Phil Rourke is executive director of the Centre for Trade Policy and Law at Carleton University and the University of Ottawa.
Making Trade and Development a Priority for the Commonwealth
Published: Wednesday, 11/18/2015 12:00 am EST
The Commonwealth Heads of Government Meeting in Malta on Nov. 27-29 provides a unique opportunity for the new Liberal government to launch a comprehensive trade and development strategy as a defining feature in its commitment to re-engage in the world.
Canada has proportionally more trade and development linkages with Commonwealth countries than any other organization of which it is a member. Sixteen (12 Commonwealth Caribbean countries, Bangladesh, Ghana, Tanzania, and Mozambique) of the 53 Commonwealth members are on Canada’s development priority list. Another six (Pakistan, Sri Lanka, Kenya, Malaysia, Malawi and Nigeria) are “partner” countries on that list.
Four of Canada’s prospective Trans-Pacific Partnerships members (Malaysia, New Zealand, Australia, and Singapore) will be in Malta. South Africa is on Canada’s trade development priority list and is always on the shortlist of prospective free trade agreement partners. Canada has, or is in the process of concluding, foreign investment protection agreements with nine Commonwealth members (India, Zambia, Ghana, Kenya, Pakistan, Nigeria, Tanzania, Trinidad and Tobago and Barbados).
Canada has been negotiating a Comprehensive Economic Partnership Agreement with India. Canada is invested in development co-operation and in promoting closer trade relations with the Caribbean Community, CARICOM.
Canada and the United Kingdom jointly sponsor, and co-operate on, trade-related development projects around the world. The UK is a key partner for Canada in getting the Canada-EU Comprehensive Economic and Trade Agreement ratified across Europe.
The prime minister’s mandate letters to the ministers of foreign affairs, international trade, and international co-operation all include trade- and development-related elements that can be addressed through these Commonwealth linkages.
The TPP and CETA agreements, an emerging markets focus with particular attention on India, and expanding Canada’s portfolio of free trade agreements are all priorities for Trade Minister Chrystia Freeland.
An activist Commonwealth trade and development agenda is an effective entry point for Foreign Minister Stéphane Dion’s job to increase Canada’s international institutional engagement. Increased trade and development programming fits Development Minister Marie-Claude Bibeau’s mandate to support the implementation of the United Nations 2030 Agenda for Sustainable Development.
In Malta, Prime Minister Trudeau could reinforce his election pledge of increased international engagement with a commitment to multi-year trade, development and diplomacy programming across the Commonwealth. Financing for a similar fund was previously set aside; it just needs to be implemented.
Canada could also commit to working more closely with the UK in the Caribbean, leveraging Canada’s existing commitments with UK Prime Minister David Cameron’s recent £300 million infrastructure pledge for the region.
Canada and its Caribbean partners should jointly announce in Malta a new and more flexible mandate for their respective trade negotiators to complete what could become a model for future Trade and Development Agreements.
In Asia, Canada can work with Australia and New Zealand to help TPP developing country partners benefit further from trade, with or without a final TPP agreement in place.
Canada and the UK are both heavily invested in development in Africa. Bilateral cooperation in support of the trade and development objectives of the continent would further strengthen Commonwealth linkages.
Commonwealth members will see each other again in mid-December at the World Trade Organization ministerial in Kenya. CHOGM 2015 could begin a discussion about a Commonwealth-focused aid-for-trade strategy to be launched at that meeting.
Prime Minister Trudeau pledged that Canada would have a stronger presence in international organizations under his watch. A bold but focused plan to address shared Commonwealth trade and development objectives would be an important step in that direction.
Phil Rourke is principal advisor of the Shridath Ramphal Centre, UWI Barbados, and executive director of the Centre for Trade Policy and Law at Carleton University and the University of Ottawa.