Reduce trade barriers and integrate economies: Manning & Harris

TORONTO — Canada needs to stop paying lip service to free trade and start doing more to spur free markets, including streamlining customs operations with the U.S., say two former prominent Canadian politicians.

In a policy paper authored for free-market think tanks, the Fraser Institute and the Montreal Economic Institute, former Reform leader Preston Manning and Ontario Tory Premier Mike Harris urge Ottawa to fully open its economy and drop restrictions on foreign ownership in business sectors such as financial services, telecommunications, and transportation.

In the report, titled International Leadership by a Canada Strong and Free, Manning and Harris — now senior fellows with The Fraser Institute — write that Canada has lost ground as an international leader in the last decade as a result of “ill-considered” economic and foreign policy choices.

A common border agency would significantly reduce
cross border transportation costs, Manning and Harris say.

“If Canadians want this country to have a leadership role on the international stage, we need to be champions of free trade and a role model for the benefits of open markets and wealth creation,” Manning said.

Adds Harris: “The market does a much better job of picking winners than government. To allow the market to do its job, governments should stop protecting the losers and eliminate business subsidies, ownership restrictions, and supply management programs.

“Whatever else Canada’s foreign policy for the 21st century entails, it needs to work. If we are to lead and inspire others, our actions must accomplish something. Talk is not enough.”

Some of Harris’ and Manning’s recommendations, include: Pursuing a binational customs union and common external tariff with the U.S., and using this process to lower remaining tariffs and reduce cross-border transaction costs.

Canada should also pursue a “joint approach to the treatment of third-country goods, a fully integrated energy market, a common approach to trade remedies, and an integrated government procurement regime.”

Furthermore, the two also urge the government to eliminating supply management, business, and agricultural subsidies.

On Canada’s relationship with the U.S., the authors point out that Canada’s place in the world depends heavily on its ability to gain and exert influence in Washington, while the ability of Ottawa to advance the security and prosperity of Canadians depends critically on working jointly with Americans.

Gratuitous anti-Americanism by some Canadian leaders under the previous Liberal government eroded this ability, write Harris and Manning.

“The inescapable factor is proximity. Like it or not, Canada lies squarely within the U.S. security and economic perimeter. We may be more comfortable with the economic aspects of proximity, but we must accept that in the present climate, security is top of mind for the U.S.,” Manning said. “In order to protect our economic interests and maintain access to one of the world’s largest markets, we must reach joint agreements that would render the border invisible to commerce.”