Navigating New Trade Routes: The Rise of Value Chains, And the Challenges for Canadian Trade Policy (The Border Papers) (Report‪)‬

Canadian trade policy is at sea, preoccupied with marginal bilateral trade agreements with minor partners and multilateral efforts to defend the dwindling ranks of dairy farmers from the bracing winds of international competition. Meanwhile, it ignores pressing problems in Canada's most important trade relationship. It is tempting to put the blame on the political caution of a minority government and wait for changing political fortunes in Ottawa to be the catalyst for a more rewarding policy approach. Unfortunately, the problem is much deeper and of longer standing. Canadian trade policy has become detached from its economic moorings. Well done, trade policy is tied to the structure of Canadian and international production and contributes to Canadian welfare and economic development. Trade agreements with Peru, Colombia, and the Dominican Republic offer, at best, marginal new opportunities for a few Canadian firms but have little impact on the economy as a whole. Trade missions to far-flung places that offer limited new prospects may similarly serve political or foreign policy imperatives but make few, if any, economic contributions. What Canada needs is a trade policy that recognizes both the increasing importance of global value chains and the critical role of Canada-US commercial and regulatory integration in gaining full benefit from their exploitation.