Canada: a new free trade leader?

For Canada’s mining industry, the week ended June 6 was highlighted by a strengthening and expansion of trade ties with some of our best South American neighbours.

• During a visit to Canada’s capital, Chilean President Michelle Bachelet and Prime Minister Stephen Harper marked the tenth anniversary of the Canada-Chile free trade pact by expanding it further into markets for industrial and agricultural products, and by adding more educational co-operation. Trade between the two countries amounted to $1.14 billion last year, though trade with all of Latin America and the Caribbean represents only 5% of Canada’s foreign trade. During Bachelet’s visit, the Canadian government also signed a free trade pact with Colombia’s government that, once ratified, will lower tariffs on mining and agricultural goods exchanged between the two countries. Perhaps more importantly, the Canadian-Colombian pact gives a political boost to Alvaro Uribe’s free market-oriented government and helps the Colombian people consolidate hard-won victories against the country’s communists, narco-guerillas, and destabilizing neighbours.

The pact with Colombia comes nine days after a new free trade deal was struck between Canada and Peru — a move that should prove particularly beneficial to both countries’ mining communities.

Canada already has free trade agreements with two other Latin American countries — Mexico and Costa Rica — and is pursuing similar opportunities with countries as diverse as the Dominican Republic and South Korea.

When U. S. President George W. Bush came into office in 2001, there were high expectations for creating some kind of “Free Trade Area of the Americas.” However, much of this potential was squandered with the rise of populist leftist governments in many Latin American countries, the preoccupation of the U. S. government with the War on Terror, and the widespread unpopularity of the Bush Administration.

Shamefully, in the U. S., both candidates for the Democratic Party’s presidential nominee came out this year against extending special trade relations to Colombia, turning their backs on a neighbour who clearly needs help from developed nations to turn away from decades of convulsive violence. On the Republican side, the Bush Administration’s own proposed Colombian trade deal faces congressional roadblocks and the new Republican presidential nominee comes across as a nationalist rather than a free trader, meaning that whichever way the vote goes in November, America’s will to spread free trade in Latin America is waning.

We’ve praised Stephen Harper’s two-year-old Conservative government for returning prudence, activism and depth to Canada’s foreign policy after his two predecessors’ embarrassing dilettantism.

Harper’s successful tour to Latin America last summer, where he articulated the idea of Canada as “third-way democratic alternative” to U. S. and Bolivarian-style economics, paved the way for much of the progress achieved in the past month.

Now, there is a wonderful opportunity for the Canadian government — lacking as it does the U. S.’s geopolitical baggage and growing lassitude in Latin America — to be a leading proponent of expanding free trade within the Americas. Canada can play a bigger part in banding together like-minded, pro-freedom governments in Canada, the U. S., Mexico, Costa Rica, Colombia, Peru, Chile and beyond, and help lift millions out of poverty and help some mining types make a few bucks, too.

• We don’t want to go on and on about oil in a mining newspaper, but it did have a remarkable price spike on June 6, posting its largest-ever one-day gain of US$11 to hit an all-time high of US$139.12 per barrel.

The oil price has risen 40% this year and, combined with higher food prices, has strained economies and stoked civil strife around the world. Banks are now openly using US$220 per barrel oil in their longer-term forecasts and large energy producers such as Russia’s Gazprom expect oil to reach US$250 per barrel “in the foreseeable future.”

Since gold prices loosely track those of oil, gold bugs may draw some inspiration from oil’s rise, but then again, they may ask themselves if they really prefer to live in the kind of world where gold trades at US$2,000 an oz. or more.

Send your Letters-to-the-Editor and other op-ed submissions to the Editor at: tnm@northernminer.com, fax: (416) 510-5137, or 12 Concorde Pl., Suite 800, Toronto, ON M3C 4J2.