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Britain is leaving the European Union. Canada may be forced to leave the North American Free Trade Agreement (NAFTA) if President Donald Trump’s conditions for Canada’s membership become too painful.
Several other nations are in unsatisfactory trade and investment treaties, and many are democracies similar to Canada.
It all provides definite opportunities for these countries.
Efficient, frictionless trade in goods generally benefits consumers no matter where they live. Trade in services is often less visible but no less important. Exchange of financial capital, data, technical know-how and even skilled, employable people, while more contentious, is normally required by prosperous, dynamic, growing economies.
Why not, then, think big and bold about developing and refining this idea?
One of the major reasons for not allowing the free flow of goods, services, capital and people across borders is the concern that some poorer nations will simply flood richer nations with unskilled people and shoddy or subsidized goods. Or that corporations will flee higher-taxed, higher-standard-of-living countries for lower-taxed, lower-standard-of-living countries.
Yet, if free-trade arrangements were between similarly advanced nations, there would be little fear of disruption. In fact, little now stops employable people seeking to emigrate from Canada to Australia, New Zealand or Singapore, or from these countries to Canada. So why not develop the potential for free flow of everything from these countries? Such flows should be as unimpeded as possible.
There’s never been a better time to have a free-trade, investment and work-permit regime between Canada, Australia, New Zealand and Singapore. All four nations are democracies with similar standards of living, similar gross domestic product per capita, similar laws based on Anglo-Saxon common law, and considerable experience as trading nations, with international banking systems.
They’re also free of exclusive or near-exclusive common markets such as the European Union. In fact, the United Kingdom is the mother country of all these British Commonwealth nations and soon will be free to join such an arrangement. Together, Canada, Australia, New Zealand, and Singapore have more than 70 million people, a GDP rivalling that of Germany, and exceeding the GDP of Russia, Brazil and even India. Moreover, these countries have enormous natural resources and human and intellectual capital.
With common product licensing and standards, and a few other adjustments to laws and regulations to ensure equivalent treatment of companies and workers, this market union could have enormous economic power and influence. It would introduce much-needed competition into the domestic markets of all these countries, particularly in banking and financial services, and increasing the demand for skilled and semi-skilled workers.
With free flow of labour, capital, resources, energy, knowledge and technology, the economies would quickly find their best and most productive uses.
Soon, other countries at a similar level could join – Chile, Israel, Mauritius, and even Botswana, and the United Kingdom when it leaves the EU. The U.K. alone would add another 65.6 million people to this trading partnership.
This type of development could bring challenges, bold new ventures and economic opportunities to all these nations.
It’s a new year, it’s time for a new market.
Ian Madsen is a senior policy analyst at the Frontier Centre for Public Policy.
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