Let’s lower the barriers to free trade

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Added on 1 July 2015 in Viewpoints

Piece by Michel Leblanc, President and CEO, Board of Trade of Metropolitan Montreal, published in Le Journal de Montréal and Huffington Post Québec.

July 1, 2015

 

Let’s lower the barriers to free trade

Our companies’ international performance has a significant influence on economic growth in Quebec’s metropolis and the province as a whole. With just over eight million inhabitants and an aging population, Quebec represents a market with limited prospects for growth. Even Canada is too narrow a market for our businesses in the manufacturing, services, and innovation sectors.

Fluid access to foreign markets is essential for such companies as CGI, Bombardier, and Moment Factory if we want to see them grow, invest, create new jobs, and contribute to our overall prosperity in the long term.

Supporting our businesses with free trade

In 2013, over 45% of Quebec’s GDP was derived from the exporting of goods and services. We must continue to encourage our companies to sell their products and services abroad by clearing the way for them. Free trade agreements are the optimal way to facilitate the internationalization of our companies. By lowering entry barriers, these agreements improve our companies’ competitiveness on these new markets.

Free trade has frequently been in the headlines in recent months. The agreement concluded with the European Union will give companies privileged access to one of the planet’s largest markets, and with the coming into force of the agreement with South Korea, we will have a means of entry into one of the most dynamic economies in Asia.

But we must not stop there. Canada is currently taking part in negotiations surrounding the Trans-Pacific Partnership (TPP). This is a strategically important agreement, and its conclusion must be made a government priority.

The Trans-Pacific Partnership, a major source of business opportunities

The TPP is one of the most ambitious initiatives in our history in terms of international trade. Not only will this partnership bring together 12 countries representing 800 million consumers and close to 40% of the world’s economy, it will also strengthen our ability to access Asian markets, where the bulk of economic growth will take place in the coming decades. According to the Fraser Institute, should the TPP come to pass, Canada could see an annual increase of $15.7 billion USD in exports.

Canada must be one of the founding countries

The TPP’s founding countries will have a chance to influence the development of the 21st century economy. The city’s businesses must be able to take advantage of the TPP as soon as it comes into force in order to position themselves advantageously in the resulting new Asian and global value chains. Conversely, delaying our entry into the TPP would be detrimental to our companies’ competitiveness vis-à-vis those of other signatory nations. Let’s not forget that our companies lost significant market shares when the United States signed a free trade agreement with South Korea before Canada did.

Negotiating in a clear manner

Canada simply cannot afford to miss the opportunity. The Board of Trade is encouraging the government to continue negotiations towards joining the TPP, and to keep the business community informed of their progress. Our companies will thereby be able to rely on a favourable and predictable business environment in which they can develop their business strategies and invest.