Democratic Congress may have a silver lining for Canada's trade interests

    OTTAWA, July 4 /CNW Telbec/ - Despite the Democrats' reputation as the
party of protectionism, the new Democratic Congress may actually give Canada
room to manoeuvre in its trade strategy, according to a Conference Board of
Canada publication.
    "At first blush, there is reason to fear an increase in U.S.
protectionism with a Democrat-controlled Congress," said author Marc Busch.
"But the centerpiece of the new trade policy - linking trade to labour and
environmental standards - is not new. Democrats are not going to retreat from
global trade, but they are using the debate over trade to leverage other
domestic political issues, such as changes to U.S. labour law."
    "The best strategy for Canada to facilitate trade in the U.S. remains
finding allies with politically influential constituents who share common
interests."
    On July 1, the Bush Administration lost its special negotiating
authority, which prevents Congress from amending trade agreements. Unless that
authority is renewed, there is no chance that the Doha Round of World Trade
Organization talks will be concluded, which is bad news for Canada. Without
the negotiating authority, however, the pace of U.S. bilateral and regional
trade agreements will slow considerably. This is potentially good news, as is
will ease the pressure on Ottawa to sign trade deals just to keep up with its
neighbour.
    As for tensions between the U.S. and China, there is little prospect of
collateral damage for Canada. Washington's growing list of WTO disputes
targeting China and sabre-rattling over China's currency could help Canada,
both directly and indirectly, by pressuring Beijing to liberalize and reform
its economy on various fronts.
    The publication, New Wine in Old Bottles? The Democrats' Trade Agenda and
Its Implications for Canada, is published by the Conference Board's
International Trade and Investment Centre (www.conferenceboard.ca/ITIC).
Prof. Busch is Karl F. Landegger Professor of International Business Diplomacy
at Georgetown University in Washington. The document is publicly available at
www.e-library.ca.

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