Expanding Canadian Trade Horizons

Many in the business community have criticized Canada for being too fixated on U.S. trade initiatives and not aggressively pursuing more trade and investment opportunities with other countries.  As a result, its overall global competitiveness has suffered.  Canada recently recorded its first trade deficit in over 30 years which was blamed on falling oil prices and also directly linked to the struggling U.S. economy.  In a recent visit to Canada, President Barack Obama gave assurances that he is committed to free trade and open borders.  He reaffirmed his pledge to rework NAFTA, but stressed that the current economic crisis may delay such matters.  If anything, the trade deficit that Canada posted, illustrates the need to lessen its dependency on the U.S. and further expand its trade portfolio.

On January 26, 2008, Canada signed a free trade agreement with the European Free Trade Association (EFTA) which consists of the countries of Norway, Switzerland, Liechtenstein, and Iceland.  The Canada-EFTA trade agreement is basic in nature and is not as comprehensive as NAFTA.  It does not include any new substantial commitments in areas of investment, services or intellectual property.  There are concerns about the negative impact the trade agreement could have on Canada’s shipbuilding and agricultural sectors.

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