Transcript Canadian Trade Policies The Domestic Political and

Geoffrey Hale
Political Science 3170
The University of Lethbridge
October 5, 2010
Outline
 Historical Context
 U.S. and Canadian policies since 2006 in comparative context
 Trade and Investment Policies and the Politics of
“Fragmegration”
 Trade Policy Processes: The Politics of Consultation
 Macro-policy / political agendas
 Technical policy issues
 Trade Policy and Public Opinion  A “Permissive
Consensus”?
U.S. Trade Policies after 2006
 Shift in control of Congress to Democrats in Nov. 2006
 Stronger union influence hostile to trade liberalization – stronger
orientation towards “enforcing” trade deals
 Reinforced by stagnant, declining U.S. living standards, growing
hostility in U.S. Public opinion, even before 2008 recession
 Loss of “trade promotion authority” (“fast track”) limits
administration capacity to negotiate trade deals
 NAFTA “revision” key focus of 2008 Democratic primaries,
despite later Obama retreat to status quo positions.
Trade policies under Harper (2006-)
 Emphasis on firefighting in Canada-US trade relations
 Negotiation of Softwood Lumber Agreement (# 3) in 2006
 Heading off Congressional attacks on Canadian energy exports
(esp. oil sands) – e.g. Section 526
 Seeking exemption from 2009 Buy American legislation
 Incremental trade diversification
 Negotiations of small liberalization agreements with EFTA, Latin
American countries (catch up with US, Mexico)
 Opening negotiations with EU, Korea
 Stalemate at WTO
 Defence of supply management interests limits room for
expanded multilateral deal.
Canada-US Economic Relations
“Traditional” and Emerging Characteristics
“Enduring” Characteristics
(Gattinger & Hale)
“Emerging” Characteristics
 Asymmetries (population, power,
 Broadening and deepening of economic
relative econ. dependence)
 Market-driven (“bottom-up”) integration
and interdependence
 North-South economic exchange >
traditional “east-west” linkages
 Political / policy linkages primarily
“transgovernmental” (not through
foreign ministries)
 Fragmentation of political / decisionmaking processes (Executive / legislative
/ inter-governmental)
 Continuing areas of policy differentiation
despite economic integration.




relations (“making things together /
interdependence”)
US focus on security issues  spillover
to Canada (borders +)
Growing sub-national government
relations (esp. provincial – state)
Need to consider impact of policy
choices on relations with Mexico
Growing importance of non-economic
issues (e.g. environmental )
Fragmegration and the
Canadian Economic Policy Agenda
 Fragmegration (per Rosenau) – simultaneous interaction of
fragmenting and integrating dynamics across multiple levels of
analysis (international / national / sub-national / sectoral /
micro)
 Result – Coexistence of multiple policy styles characterized by
different forms, levels of interaction between (sub-)national policies
----------------------------------------------------------------------
Conflict
Independence
Harmonization
Parallelism -- Coordination -- Collaboration
Fragmegration and the
Canadian Economic Policy Agenda
 Hard Law
 Legally binding and enforceable obligations between / among
states (e.g. international treaties)
 Soft Law
 Political and legal arrangements of various levels of formality for
managing specific areas of inter-, trans-governmental relations
 E.g. Memoranda of Understanding, international consultative
organizations, working groups, specialized intergovernmental
bodies.
Fragmegration and Policy Processes
 Both cause and outcome of decentralization of policy processes
 within governments (from “central agencies” to ‘specialized
agencies’) or (from US Executive Branch to Congress)
 between governments (e.g. from federal to provincial
governments)
 from governments to private, non-profit, or mixed governance
organizations
Fragmegration and Investment Policies
 Investment policies increasingly market- and sector-driven in
Canada since 1990s
 WTO provisions governing “national treatment” of foreign
investment (w. selected exceptions) - $ 300 mm review threshold
 Investor-driven regulatory regime (provincial / interprovincial)

Contra reg. regime driven by interests of corporate executives or national
government officials.
 Reinforced by Canada’s status as net “outward” FDI investor
 Competition Bureau major federal regulator (ex. national security
regs. under Investment Canada Act // U.S. CFIUS provisions)
Fragmegration and Energy Policies
 Market-driven policy framework driven by trends towards
price decontrol, integrated cross-border distribution networks
since 1980s
 Regulatory asymmetries – ownership and primary regulatory
responsibility for energy industries in Canada – provincial with
residual federal role; U.S. – federal, with substantial state and
local role in related environmental and land use policies.
 Market asymmetries – U.S. major oil importer (> 2/3 of
consumption (2008)); Canada net exporter; largest foreign
supplier of oil, natural gas, electricity, uranium.
 Major differences in market integration / context for major energy
sources (oil, natural gas, electricity)  significant regional
differences in energy markets
Trade Policies and
Consultation Processes
 Objective – greater legitimacy through
 Consultation with key stakeholders and general public
 Relative transparency through public availability of information,
multi-stage consultation processes, citizen engagement, and
independent appeals processes following implementation.
Citizen engagement vs. consultation
Citizen Engagement
Consultation
 Readily accessible information
 Oriented towards formal
 Oriented towards “average

citizen” – not interest / activist
groups
 Discussion of broad policy
goals (problem identification /
feedback) – but within broader
context of government policies
 Frustrating for those at odds
with basic policy thrusts



stakeholders
Separate political (big picture) /
bureaucratic (technical) processes
Usually oriented towards technical
details  expertise required
(requires substantial investment)
Usually function within context of
broader policy goals, if with
potential for separate sector
strategies  often involve different
federal departments
Potential for “process exhaustion”
Public opinion and trade policies
 Input legitimacy (based on prior consultation on details) vs.
Output legitimacy (based on results or outcomes)
 Publics often divided  supporters / opponents / “broad center”
 General public typically less interested in technical details than
sense that governments are “listening”, addressing broader public
concerns
 Are broad policy outlines within the “permissive consensus”


Promoting visible economic well-being while maintaining role of
domestic governments accountable to their citizens
Appearance of consultation, responsiveness
 Key sectoral debates may involve more intensive debate with
narrower groups of stakeholders (e.g. agricultural sub-sectors,
intellectual property)