Canada's Free Trade Deals
Norway, Switzerland, Iceland & Liechtenstein Exports & Imports
Harper's government shows progress towards a free-trade deal with the European Free Trade Association (EFTA) trading bloc.
The current trend in global trade is for countries to sign up free-trade partners, typically as part of regional trade blocs. Nations like Australia have had great success in bilateral and multilateral free-trade negotiations.
In contrast, Canada has signed only one free-trade agreement over the past six years, a treaty with Costa Rica in 2001. Multinational talks hosted by the World Trade Organisation (WTO) in Doha have stalled, so Canada can no longer depend on its WTO membership to liberalize international trade.
Canada Negotiates With European Free Trade Association (EFTA)
Canada is now negotiating a free-trade deal with the EFTA, a group of four European countries outside the European Union (EU). Norway, Switzerland, Iceland and Liechtenstein already do some US$10 billion in annual trade in Canada. Norway and Iceland are among the ten richest countries in the world.
The text of Canada's first free-trade treaty in over six years has yet to be finalized, although both Canadian and EFTA negotiators admit to significant progress.
Canadian EFTA Imports And Exports
Canada's merchandise exports to the EFTA include aircraft, aluminum, food products, iron, pharmaceuticals, precision instruments, telecommunications equipment and vehicles.
Imports from the EFTA to Canada are automobile accessories, chemicals, cheese, laboratory equipment, machine tools, metals, petroleum, plastics, seafood, ships and watches.
Canadian Barriers To Free Trade
Once the proposed Canada-EFTA treaty is signed by all parties, Canada's House of Commons has to pass legislation to enact the agreement into law. Removing existing Canadian trade tariffs and other barriers that protect domestic industries won't be easy.
For example, Ottawa will have to scrap a 25% duty on foreign-made ships and stop subsidizing the Canadian shipbuilding industry.
Exporters of marine vessels, Iceland and Norway insist that the proposed free-trade agreement remove Canadian shipbuilding duties and subsidies.
Canada's struggles for free trade are political. The Shipbuilding Association of Canada (SAC) operates at one third of its capacity. Yet the SAC estimates that Canada's demand for ships over the next 15 years will generate some US$8 billion in Canadian jobs.
Domestic shipbuilding advocates are certain to loudly protest the proposed free-trade agreement once introduced in Canadian parliament.
Canada's Two-Way Merchandise Trade Depends On Free Trade
If parliament passes the proposed free-trade treaty with EFTA, Canada will show its trade buddies that the Great White North wants to compete for preferential global trade agreements.
Sources: Canada nears European trade treaty (Globe and Mail, February 3, 2007); State of Trade 2006; Department of Foreign Affairs, International Trade
