Trudeau and Argentina's president say trade — not protectionism — will help the poor, unemployed
Canada’s prime minister and his Argentine counterpart took direct aim Thursday at the walls of protectionism set to be erected around the United States, saying that freer trade is the best way to pull their countries out of economic uncertainty.
Justin Trudeau and Mauricio Macri said there is real anxiety that progress and global trade have resulted in people being left behind or children being robbed of the same opportunities afforded their parents and grandparents.
That anxiety has propelled anti-trade and anti-immigration movements in various places around the world, the most compelling examples of which are the election of Donald Trump in the U.S. and Britain’s vote to exit the European Union.
“It is an indisputable fact that trade is good for economic growth and can and should be good for all citizens,” Trudeau told a news conference Thursday.
“The challenge we’re facing right now is to demonstrate that we can create trade deals that give benefits to small and medium-sized enterprises, that give benefits to the middle class and to the communities they call home. That’s exactly where Mauricio and I agree entirely.”
Addressing the recent election of Donald Trump as the next U.S. president, Trudeau said the Canadian and U.S. economies are so intertwined, the relationship between their leaders is less important than the relationship between their respective populations.
“There is a depth of economic, cultural, people-to-people connections between Canada and the United States that go far beyond the personalities or the ideologies, or the perspectives in leadership of the two people who happen to be running their countries at any given time,” Trudeau said.
Speaking in Spanish, Macri said his government believes that trade is the way to raise his citizens out of poverty, alleviate pressure on middle income earners and help the country’s finances overall.
He could use the help.
Macri is moving the country to the political centre after years of populist, nationalistic governments. He has made changes to currency rules, the tax code and the central statistics office in an effort to rebuild credibility and investor interest.
But Macri’s moves have been problematic for Argentines: their currency fell in value by 30 per cent after controls were removed, some 200,000 jobs have been lost based on estimates from the Argentina Center of Political Economy, and the loss of energy subsidies has seen electricity costs shoot up by about 300 per cent.
Domestic polling figures suggest the majority of Argentines are not pleased with the state of affairs in their country.
“We are paying for decisions we have made in the past. They weren’t bad decisions, but they have a cost,” said Melisa Argibay Rojas, who says she struggles to pay her electricity bills in the Argentine capital.
“I think we need investments. I think we need regulations. I don’t think we need to sell everything. But I think it’s good for the country that (foreign) money enters. We need it.”
So what’s in it for Canada?
The duo declared that Argentina would open its doors again to Canadian pork product as a first step towards an improved relationship between the two countries. Trudeau also said he and Macri would work together at the World Trade Organization to promote a “progressive and inclusive” trade agenda.
Trudeau told reporters the two countries would collaborate on mining operations, renewable energy and nuclear science for energy production, and that Canada would help resettle 3,000 Syrian refugees in Argentina by providing advice on private sponsorship, security screening and integration.
“The agreements we reached today are yet another demonstration of the longstanding friendship and partnership between our two countries,” Trudeau said.
Macri also said he expected Canadian companies to be interested in investing in his country’s infrastructure program, which he compared to the multi-billion, multi-year program the Liberals are undertaking.
Canadian companies already have a foothold in Argentina, mainly in the mining sector, which receives the bulk of the attention in Canada over concerns about the social and environmental impact of projects.
Paul Haslam, an associate professor of international development at the University of Ottawa, said his research suggests Canadian firms are not more likely than other foreign-owned firms to cause tensions.
“That being said, some firms are involved in conflict and there has been a couple of nasty accidents with Canadian firms recently in Argentina,” said Haslam.
Playing ‘catch-up’ with South America
Macri is looking to make it easier for mining firms to operate in the country, cutting taxes federally and looking to have the provinces, who have jurisdiction over mining operations, follow suit, Haslam said.
A former Canadian diplomat to South America called Trudeau’s visit a shrewd geopolitical move given the political shift that is underway in Argentina, something that’s being mirrored in neighbouring countries.
Allan Culham said the prime minister’s timing is perfect for building personal relationships, which the South Americans like.
“It’s a kind of terra incognito for a lot of Canadian society,” said Culham, who served as Canada’s ambassadors in Guatemala, El Salvador, Venezuela and to the Organization of American States.
“That said, Canadian society is much more engaged in the region than the Canadian government. In fact, the Canadian government is playing catch-up.”