Nancy Morris introduced our speaker for the evening by advising that she was able to get Carolynn Osborn to give a presentation through Tami Reynolds, who is a former work colleague of Carolynn`s. Carolynn has been with the Government of Manitoba for 29 years. She has a Bachelor of Arts in Economics and a Master of Science in Agricultural Economics from the University of Manitoba.
Carolynn joined Manitoba Growth Enterprise, specializing in international trade policy, 6 years ago. She assists in the development of Manitoba’s negotiating position and represents Manitoba’s interests in international trade disputes and international trade negotiations initiated by the Government of Canada. Carolynn was the co-lead negotiator for Manitoba in the NAFTA renegotiations, the lead negotiator in the Comprehensive and Progressive Agreement for Trans Pacific Partnership negotiations and is working on implementation of the Canada/EU free trade agreement and Manitoba’s defence in the Canada/US softwood lumber dispute.
Prior to joining Growth, Enterprise and Trade, Carolynn worked in agriculture policy with Manitoba Agriculture for 23 years, laterally focusing on international and domestic trade policy relating to the agriculture and agri-food sector. In addition to overseeing staff in a variety of agri-food policy files, she was the Canadian Co-Chair of the federal/provincial/territorial committee tasked with re-negotiating the Agriculture Chapter of the Agreement on Internal Trade and was the lead official representing Manitoba in agriculture-related disputes including Hog and Beef CVD investigations, BSE border closures and efforts to repeal US Country of Origin Labelling.
Carolynn has 2 adult children and lives in Winnipeg with her husband DeWayne.
Canada imports $411 billion of goods from the U.S.A., they are our largest trading partner. Canada is a trading country. Canada was originally designed to supply goods to England. Manitoba started off as the center of the fur trading industry. One in four jobs in Canada is linked to trade. In 2017 Canada had $666 billion in total trade. In Canada, 31% of GDP is attributed to trade.
Carolynn showed a chart indicating the world trading countries. Countries with a large percentage of the GDP coming from trade are usually small countries. Countries with a small percentage of their GDP coming from trade tend to be the large powerhouse countries ie. USA, Japan. Canada was approximately in the middle of the GDP percentage chart.
TRADE
- Countries trade to gain a comparative advantage when they specialize in something / product. They gain efficiencies in production when they specialize. Then trade for the items they are unable to gain advantages in production.
- Larger economies of scale
- Greater competition / efficiencies for domestic firms. Allowing trade forces everyone to be better at what they trade in.
- Increase in technology transfers. Example would be cell phone development has led to better cochlear implant devices, smaller parts etc.
- Development of supply chain linkages. An example would be that parts for the manufacture of the I Phone come from 33 countries.
TRADE AGREEMENTS;
Basically, agree on the rules.
- Eliminate or decrease tariffs.
- Common set of rules.
- Encourage investment due to stability.
- Enhance cooperation.
- Address intellectual property in areas such as E-commerce.
TRADE AGREEMENTS vs TRADE DISPUTES;
The trade agreements are the set of rules, while trade disputes happen when the rules are not followed. An example of not following the rules would be dumping of product and subsidizing by governments. Another area of dispute could be creating unnecessary barriers to trade through regulations.
CANADA`S FREE TRADE AGREEMENTS;
- 59 FIPA - Foreign Investment Protection Acts, countries from Albania to Zimbabwe.
- 13 FTA - Free Trade Agreements
- 1 signed CPTPP - Comprehensive and Progressive Agreement for Trans-Pacific Partnership (aka – Trans-Pacific Partnership)
- 1 negotiated CUSMA – Canada-United States-Mexico-Agreement (the country you are in comes first in the name).
- WTO - World Trade Organization, bilateral agreements. TRIPS, TRIMS, GATT, GATS, GPA, TFA, ITA
Why is CUSMA such a big deal? 70 % to 80% of what we trade goes to the USA. Negotiations for the agreement were launched in 2017. The two reasons for a NAFTA replacement are;
- Modernization, NAFTA is 23 years old. Need trade to include electronic communication, not all on paper.
- Renegotiation.
CUSMA OUTCOMES;
Goal was to first do no harm.
- Maintains tariff free access
- Modernizes
- Provide stability to investors, business
- Canadian Concessions – found in dairy & poultry (increase U.S. access), I.P.(copyright protections).
- Ratification – Canada, no issues seen. USA, must pass Congress. Democrats don`t like President Donald Trump and have said they will not pass the CUSMA. Democrats don`t like free trade. President Trump has said he will withdraw from NAFTA to force Congress to accept CUSMA. Some questions if he is legally able to do this.
CETA - Comprehensive Economic and Trade Agreement (CETA) is a free-trade agreement between Canada, the European Union and its member states.
- Ratified in Sept. of 2017
- E.U. has more than 500 million customers.
- 28 country market which generates $20 trillion in annual economic activity.
- The treaty has eliminated 98% of the tariffs between Canada and the EU.
- $3.3 billion procurement market.
CPTPP – Trans-Pacific Partnership
- Ratified in Canada to take effect on December 30, 2018.
- 6 of 11 countries will be ratified by Dec. 30, 2018 including Canada.
- 494 million people in trading agreement zones with a total GDP of $10.2 trillion dollars.
- Includes 13.6% of global GDP
- Will give preferential access for Canada over USA, to markets in Japan, Vietnam, Malaysia.
DIVERSIFICATION;
The United States has been our largest export market since the end of WWII. Canada exports 70% to 80% of our trading goods to USA. This is because exporters find dealing with the USA easy because they deal in the same language, similar cultures and transportation costs are comparatively low due to USA being close to us.
The big question is, will Canadian businesses take advantage of new markets? We must, as a nation, be willing to diversify and do it quickly to develop our new trading partnerships.
Q/A
1.- Brian Campbell asked why we have always traded with the USA?
A.- Their proximity to us, language, stability of markets.
2.- Nancy Morris questioned why we put up with the USA regarding softwood lumber trade issues if Japan wishes to import our softwood lumber?
A.- Transportation costs must be factored in to the bottom line of the deal. Currency volatility issues with Japan.
3.- Chuck Crocker inquired as to the Brexit effect on trading with Britain.
A.- The answer is dependent on the type of Brexit that is finally ratified.
- Soft Brexit – Britain will remain to some degree part of the EU for trading purposes.
- Hard Brexit – Britain will no longer be any part of EU.
CETA – Canada negotiating a similar agreement for just Britain, to take effect if needed.
4.- Lloyd Talbot wondered if Carolynn has worked with Canadian Foreign Affairs Minister Christia Freeland?
A.- Yes she has. Carolynn has been very impressed with her.
5.- Al Roberts asked what options are available for WTO if USA withdraws from the agreement?
A.- USA is not alone with it`s WTO issues. The USA demand to dissolve NAFTA’s independent dispute settlement process, and instead take disputes into US courts is the issue. There is talk that WTO is tearing apart trading, that there are not much in the way of sanctions to support findings by the WTO regarding trading disputes. The USA is not allowing new Judges to sit on the review panel, effectively killing the WTO from the inside.
Plan B would be to create a new dispute panel that the USA is not a part of. This is the “nuclear option”, it is hoped that the USA does not make this need to happen.
Carolynn was thanked by the club for her very informative presentation. We all learned something new during her talk. She was advised that a donation to ShelterBox would be made in her name to recognize her presentation here tonight.
