International Trade Diversification Minister Jim Carr’s office says Canada will continue its trade negotiations with Mercosur, the South American trading bloc that includes Brazil, despite demands to call a halt to the talks until more action is taken to protect the Amazon rainforest.
On Friday, NDP Leader Jagmeet Singh called on the Trudeau government to follow the lead of countries like France and Ireland, which are refusing to support the ratification of the European Union’s trade agreement with Mercosur because of Brazil President Jair Bolsonaro’s failure to respond to international concerns about the global environmental impact of deforestation.
Bolsonaro favours developing, not protecting, more of his country’s forested land. It’s unclear the Brazillian government will accept aid G7 countries offered Monday to help fight this year’s record number of fires.
But so far, Canada isn’t letting this issue stand in the way of its trade diversification goals.
In a statement to CBC News, the minister’s office said Canada’s negotiations with Mercosur have made “good progress” since they were launched in March 2018. Ottawa hosted the most recent negotiating round, which concluded on August 2.
It is still “early in the negotiations,” the statement said. Comprehensive trade talks regularly take years to conclude.
Limited economic potential?
While there are four countries currently in the Mercosur bloc — Argentina, Brazil, Paraguay and Uruguay — over three quarters of Canada’s current trade is with Brazil. Argentina represents about 20 per cent.
Finding new markets for Canadian goods and services is key to Carr’s diversification mandate. Last fall’s economic statement prioritized export growth as key to Canada’s future economic performance.
But here, one Trudeau government priority risks contradicting another: being seen as a leader on the world stage when it comes to environmental protection and fighting climate change.
“Justin Trudeau is putting the interest of rich corporations ahead of the fight against climate change by continuing free trade negotiations with President Bolsonaro,” Singh said in a statement Tuesday, arguing that economic sanctions are Canada’s best tool for pressuring Brazil’s government.
“This is another disturbing example of Justin Trudeau saying and tweeting pretty things in public, when behind closed doors he’s doing business with the person responsible for the deforestation and devastation of the lungs of the planet,” the leader of the NDP said.
Is the potential of these negotiations worth this political flak?
It’s not clear there’s a big, valuable deal to be done with Mercosur. Economic projections from Global Affairs Canada suggest this proposed agreement could boost Canada’s real gross domestic product by about US$1.3 billion. That represents economic growth of about 0.051 per cent — not a huge gain, relative to the importance of other markets.
Historically, Canada has focused its global talks on getting more tariff-free access for its resources, especially farm exports.
But South America is already rich in natural resources. Countries like Brazil and Argentina are some of Canada’s strongest international competitors in commodities like beef and soybeans.
Canada may be seeking to expand its trade in services with these South American countries. Because Global Affairs is notoriously strict about not showing its hand in advance, the precise gains from these negotiations are unlikely to be revealed until a deal has been reached.
‘Most progressive in history’
The Trudeau government has branded its trade strategy through “progressive” and “inclusive” agreements, focused on environmental protections, strong labour rules, gender equality and Indigenous rights, as well as growth for smaller businesses and benefits for middle-class workers and consumers.
But can a truly “progressive” trade deal be reached with a Brazillian president dubbed the Donald Trump of South America?
In its statement yesterday, the government noted the $15 million it has pledged, along with water bombers, to help fight the Amazon fires. It also noted investments in the Canadian climate fund to help with climate change adaptation in the Americas.
The Mercosur negotiations have been “amongst the most progressive in our country’s history,” it said. It includes a comprehensive environment assessment said to be “the most comprehensive and rigorous ever undertaken.”
Canada is seeking an “ambitious, comprehensive and enforceable” environment chapter in the final deal, which could include language on sustainable forest management and combating illegal logging.
Environmental groups were among those calling for Canada to end these talks last Friday.
“It’s important not only for our environment but for Canadian jobs right across the country that we continue this important work,” the statement from Carr’s office said.
Environment Minister Catherine McKenna also defended the continued negotiations when she spoke with reporters during an announcement today in North York, Ont.
“Mercosur will have the top environmental protections of any trade agreement. We need to be linking trade to the environment,” she said.
“I think there’s a real opportunity that in the trade agreement it talks about reforestation. That’s the approach that Canadians expect.”