By Don Leitch
Media coverage of trade and trade agreements is nearly constant. If not on the front page, trade stories abound in the business section. But trade is more than a political or business story. Trade’s importance is at the heart of the Manitoba economy — more significant in Manitoba than most people realize.
For starters, the Manitoba economy is much larger than it would otherwise be if it were not for the fact that we export goods and services from Manitoba throughout Canada and North America and across the globe. We are a trade-dependent province. Whether it be grain, beef, pork, value-added agricultural products, airplane components, farm equipment or general manufactured goods, tens of thousands of Manitoba jobs depend on trade. The quality of life we enjoy is enhanced through trade.
The Canada West Foundation estimated that every year two-way trade across the Manitoba-United States border exceeds $25 billion per year — that is more than $69 million a day crossing our border with the U.S. Add to that the trade that flows east and west to other provinces and beyond, and it is clear why a trade agreement is critical to Manitoba. What is the importance of trade agreements? The agreements set the rules for orderly trade.
A year ago, three national leaders from Canada, the United States and Mexico signed the newly negotiated North American Trade Agreement.
The relief for businesses was that the new North American trade agreement would offer certainty, stability and predictability, all essential to the orderly functioning of the North American economy.
For most of the past year, squabbling continued in each country over whether the agreement was good, or at least an improvement over the previous NAFTA. Many Americans were unhappy. Some Mexicans grumbled. Canada, too, has its share of naysayers with some commodity sectors not believing they benefitted significantly or had given up too much in the negotiations.
Within the U.S. government, considerable political debate led to media speculation on whether the trade agreement would be approved by Congress. The freshly signed but unratified agreement became a political football, politicians using it for their own advantage in the run-up to the American elections later this year. Many were openly suggesting they would vote in favour of the trade agreement in exchange for support on other priorities. Despite the economic urgency, these politicians thought the trade agreement was something to be bargained off.
A few weeks ago, Congress finally granted approval. And despite the theatrics, the U.S. Senate also quickly approved the deal with an overwhelming majority. And this week, the President signed the agreement into law.
Now the ball is with the Canadian politicians — and for added drama we have a minority government
coming out of our federal election last fall. Without a majority of votes in Parliament, the federal government cannot guarantee quick approval for the agreement it negotiated. Remember too that the official opposition was highly supportive of a renewed agreement. Other parties continue to oppose all or parts of the new agreement. The sooner it’s approved the better for business and Canadians.
So how soon will the Canadian Parliament give approval to the new agreement? No one can predict that, but the governing party and the official opposition philosophically support the new agreement, and approval will ultimately be granted.
Once we have Mexican approval, still on a timeline to be determined, we will finally have the certainty and predictability that is so necessary to support the North American trade environment.
Most people will probably not notice once the final approvals are in place because trade will continue as it is today. And that is good. We do not want disruptions. We want a smooth flow of trade across our borders, creating jobs and incomes for Manitobans by participating in a strong trading block.
With the new agreement in place we will have avoided disruption to the economic foundations that provide the incomes and livelihoods for families throughout the province.
Coupled with the two other major trade agreements, the Canada-EU Agreement with Europe, and the Trans Pacific Partnership with eleven Pacific countries, Manitoba is well positioned to be an active and growing participant in global trade.
And that is a positive for every Manitoban. With the considerable trade opportunities open to us, we can continue to invest and grow our economy.
But as a province we need to plan and set our strategy to ensure we capitalize on the agreements.
With both the federal and provincial governments committing to growing and diversifying trade, Manitoba businesses are ready to expand their activities and with that the jobs created.
Don Leitch is President & CEO of the Business Council of Manitoba