Gwyn Morgan may have made a lot of money for EnCana shareholders, but I have rarely found his economic commentary in the Report on Business to be very well-informed. The main point he makes in today’s column “New Economic Order Demands New Attitude” is accurate if familiar – Canada participates in the global economy primarily as a commodity producer and […]
Read moreThe notion that tariffs caused the Great Depression has been repeatedly invoked in opposition to allegedly protectionist policies and to press ahead with deregulatory “free trade†deals. Also, the current collapse of international trade is sometimes cited to suggest a rising tide of protectionism today. Yesterday, Paul Krugman had an excellent post debunking the underlying claim that tariffs caused the […]
Read moreIt is not every day that two Relentlessly Progressive Economists appear on the same TV panel. But Andrew and I did exactly that on last Wednesday’s episode of The Agenda with Steve Paikin. We debated international trade with a World Bank economist, Cato Institute analyst and Canadian trade lawyer.
Read moreI was going to comment on Jim’s post, but ended up writing enough to warrant a new post. Jim correctly argues that Buy American provisions are tiny in the grand scheme of Canada-US trade. Similarly, whatever potential procurement preferences Canada bargained away would also have been tiny by this standard. The overall economic effect of last week’s deal will be […]
Read morePaul Samuelson was the greatest economic theorist of the 20th century. If we see Leon Walras, with his general equilibrium theory, as the Newton of economics – which I think Samuelson did – then Samuelson was its Einstein. In his Foundations of Economic Analysis in 1947, he laid out the fundamental mathematics that underlay the ideal market economy. For the […]
Read moreIt remains unclear whether or when Canada-US negotiations on “Buy American†policies might produce a deal. While such a bilateral agreement could serve both countries well, Canadians should resist pressure to have our provincial and municipal governments sign onto the World Trade Organization’s Agreement on Government Procurement. A Canadian exemption from Buy American requirements makes sense given the integration of […]
Read moreLast week, the Minister of Finance announced his aspiration to unilaterally eliminate Canada’s few remaining tariffs on imported machinery and equipment. Saturday’s Globe and Mail quoted me doubting this proposal given the severity of Canada’s offshore trade deficit in that area. I elaborate my case in the following op-ed, which is printed in today’s Financial Post with Terry Corcoran making […]
Read moreInitial reports of this morning’s current account deficit emphasize that the fourth quarter of 2008 was the first such deficit since the second quarter of 1999. While correct, this historical comparison overlooks a crucial difference. Canada’s balance of investment income has always been negative. In the second quarter of 1999 and most previous quarters, Canada’s trade surplus was not large enough […]
Read moreA standard objection to the Buy Canadian policy proposed yesterday by Canada’s largest industrial unions was that Canada enjoys a trade surplus. Such a policy would allegedly prompt foreign retaliation, erasing our current trade surplus and its contribution to aggregate demand in Canada. This morning, Statistics Canada reported that we actually ran a merchandise trade deficit in December, the first […]
Read moreIt is amazing to see the charged responses to the idea of a made-in-Canada policy for procurement related to infrastructure stimulus spending. Perhaps it is just that all economists are supposed to accept free trade as the One True Policy. But what I am seeing are largely moral arguments for free trade in the abstract rather than an examination of […]
Read moreInternational Trade Minister Stockwell Day is claiming credit for an amendment to the US stimulus bill affirming that its Buy America provisions will be “applied in a manner consistent with US obligations under international agreements.” Canada tops the list of countries to which the US has such obligations. However, Day and his colleagues demanded the complete removal of Buy America […]
Read moreAlarmist media reports on “Buy America” rules for steel used in US public infrastructure projects have emphasized the value of Canadian steel exports allegedly threatened, but have largely ignored the similar value of American steel imported by Canada. In fact, in the most recent month for which data is available (November 2008), Canada bought more steel from the US than […]
Read moreThis blog has often criticized columns by Neil Reynolds. But he had quite an interesting one in yesterday’s Globe and Mail. In a nutshell, the column argues that used clothing donated from western countries has limited the emergence of garment manufacturing in Africa, thereby stunting that continent’s industrial development. Reynolds emphasizes this research as an example of the unintended consequences […]
Read moreRalph Nader and Toby Heaps make an excellent case for a global carbon tax. With an Obama administration there is the possibility of such a thing happening, and it would be much more sensible that a complicated cap-and-trade system that will take years to get up and running. Even if a North American cap-and-trade system emerges that does not fall […]
Read moreDigging through the rubble of the financial crisis, Jeffrey Sachs lays out his agenda for a new international financial architecture, aka Bretton Woods 2.0 (version 1.0 was the system laid out in 1944, composed of the International Monetary Fund, the World Bank and the ITO->GATT->WTO): First, we need to restructure global finance, based on an expanded system of capital adequacy […]
Read moreAs Andrew suggests, the largest of Harper’s promises for manufacturing could aggravate the manufacturing crisis by widening Canada’s largest trade deficit. Eliminating the few remaining tariffs on machinery and equipment imported from outside of North America would encourage purchases of foreign-made machinery and equipment instead of Canadian-made machinery and equipment. From January through July 2008, Canada’s trade in machinery and […]
Read moreThe Globe and Mail is carrying a report today on a possible Canada-EU trade deal, suggesting that negotiations will be launched shortly after the election. http://www.theglobeandmail.com/servlet/story/RTGAM.20080918.wtrade18/BNStory/International/home Described as a negotiation of deep economic integration, “the proposed pact would far exceed the scope of older agreements such as NAFTA by encompassing not only unrestricted trade in goods, services and investment and […]
Read moreIn the second quarter of 2008, record oil prices outweighed the continuing manufacturing crisis, the worst services deficit ever recorded, and widening deficits in investment income and current transfers. The Surplus in Perspective The rise of Canada’s current-account surplus to $6.8 billion in the second quarter is positive news for the Canadian economy. However, this surplus is still less than last year’s […]
Read moreRoutledge has just published a book comparing Australian, Canadian, and Mexican experiences of free trade with the United States. There are three chapters on each country examining long-run socioeconomic development prior to free trade, the specific free trade deals, and future policy alternatives. I wrote the Canadian chapter on the Canada-US Free Trade Agreement and NAFTA. A “pre-print” version follows. […]
Read moreI went trawling through the detailed trade by commodity data on the Industry Canada (Strategis) web site the other day in search of examples of potential job creation from raising the Canadian content of public sector procurement (as called for, not just by the labour movement but also, recently, by the Canadian Manufacturers and Exporters.) As a very rough rule […]
Read moreToday, Statistics Canada revealed that our December 2007 merchandise trade surplus was the lowest one since November 1998. This fact is yet more evidence that the rise in energy exports has been smaller than the decline in exports from manufacturing and other sectors. The conventional story about high oil prices driving-up the loonie assumes that these prices have increased our […]
Read moreThe International Energy Agency requires member countries to maintain emergency oil reserves in case oil imports are temporarily disrupted. Canada was exempted from this requirement because we are a net oil exporter. However, the current pipeline system and NAFTA’s energy chapter limit our ability to supply eastern Canadian consumers with western Canadian petroleum. Western Canada’s vast oil exports to the […]
Read moreScott Sinclair, Canadian Centre for Policy Alternatives Opening Statement, Re Proposed Canada-Korea Free Trade Agreement Standing Committee on International Trade. Thursday, November 29, 2007 Thank you for the invitation to appear today and for the opportunity to raise some serious concerns about the proposed Canada-Korea Free Trade Agreement and Canada’s current approach to bilateral trade agreements. In the time allotted, […]
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