Too soon to decide whether to join Pacific Alliance: Stephen Harper

CALI, Colombia – Prime Minister Stephen Harper says it is too soon to decide whether Canada should join the Pacific Alliance trade bloc in its mission to deepen economic integration.

After a day spent meeting with Latin American leaders and looking into their plans to form a European Union-like bloc to compete with Asia, Harper said he was not ready to make the call.

“While it is too early to say whether we should seek full membership in the Alliance, our presence here is obviously important to our Americas strategy, and our focus on promoting democracy, prosperity and security with like-minded nations in the hemisphere,” he said in prepared remarks delivered to the Canadian media after the summit.

The Pacific Alliance groups Mexico, Chile, Colombia and Peru. Several other countries are observers, like Canada, are candidates for membership soon.

“These countries have set an ambitious agenda of economic openness and integration,” Harper said before taking questions.

“These are also nations clearly committed to strengthening and entrenching the democratic values and institutions that are a core part of Canada’s international agenda.”

Critics have argued that Canada should resist flirting with the Pacific Alliance, partly because Canada is already involved in a multitude of trade talks, and partly because Canada has free-trade agreements with the four key countries already.

Canada’s many forays into free-trade talks across the globe are not the ineffective scatter-gun approach described by critics, but an effort to set up “gateways” to the world’s biggest trading blocs, says International Trade Minister Ed Fast.

“There’s a lot of misunderstanding of what we’re doing,” Fast said in an interview in a cool and quiet corridor at the lush country club where he and Harper were observing Latin American economic integration talks.

Ottawa is negotiating with the Ukraine because it is a “gateway” for Canadian business into the surrounding region, Fast said. Similarly, that’s why Canada has a deal with Jordan, negotiations with Morocco, and is flirting with Thailand and now Latin America.

“It’s a launching pad into the larger region,” Fast said.

Canada is an observer of the Pacific Alliance discussions to allow for free movement of capital, labour, services and investment. The alliance, which groups Mexico, Colombia, Peru and Chile, has imposed an aggressive agenda upon itself, pushing hard to break down barriers and deepen integration.

“In less than two and a half years, we have made profound advances,” Juan Manuel Santos said in his opening statements to the one-day summit.

“Let’s talk about the route forward, over the new few months, about how to deepen our integration,” Santos said, urging his counterparts to make history.

“We have immense, immense potential.”

Whether or not it becomes a full-fledged member is a decision for another day — both for Canada and also for the four founding members who need to decide if Canada is a good fit.

There’s no doubt that Canada’s approach to economic growth is compatible with the Pacific Alliance at a high level, Fast said.

“They are the most like-minded and trusted partners in the region.”

Even though most of the alliance members have seen changes in government recently, their free-market approach to economic growth is well-entrenched, Fast added.

It’s that kind of statement that makes NDP international trade critic Don Davies believe Ottawa’s aims are more political than economic. Canada already has free trade agreements with all the Pacific Alliance members. So the federal Conservatives seem more interested in joining a right-wing club that would counter the left-wingers that are so powerful in Latin America, Davies said.

The involvement with the Pacific Alliance “seems quite clear to be primarily a political initiative, not a trade one,” Davies said in an email.

From a trade perspective, Canada is already stretched too thin, he added.

“I have huge concerns about the Conservatives’ scatter-shot trade strategy. There appears to be no sense of prioritizing. Our trade negotiators are overstretched.”

Given that almost all of Canada’s trade with the alliance countries is tariff-free, and that Canada is already talking to most of the members in the Trans-Pacific Partnership negotiations, “it seems clear that the Pacific Alliance is a waste of energy and unnecessary duplication of resources.”

But senior Canadian government officials say Canada is still just an observer at the Pacific Alliance and has made no commitment to join as a member.

“It makes sense that we’re here as observers. Observer doesn’t necessarily mean member-in-waiting,” said one official on condition her name not be used — standard practice during policy briefings.

By sending Harper as well as Fast to the talks in Cali, Canada is sending a signal to its competitors that it is serious about trade with dynamic partners in Latin America, analysts say.

“I think it’s a signal to some very close partners,” agreed the senior official.

Harper attended some of the plenary sessions on Thursday, and had a bilateral meeting with Chilean President Sebastian Pinera.

The Pacific Alliance is ambitious. It aims to break down barriers not just in goods, but also services, people and capital. The four founding members are focusing on removing those barriers internally first, and then hoping to bring in other members to form one of the largest integrated economies in the world.

For now, though, the Canadian government does not know exactly what that trade bloc will look like.

“They’re still dotting some i’s and crossing some t’s,” said the official.

The summit got off to a damp start on Wednesday night. Several vehicles got stuck in the mud after days of rain in the valley city. Harper and many others missed a dinner meant for visiting leaders and 600 dignitaries hosted by Santos.

Opening ceremonies were delayed Thursday morning because of more rain, but the sun peeked through by mid-afternoon.

Some non-government organizations say Canada already sacrificed labour rights and environmental protections by signing on to a free trade agreement with Colombia, and they don’t want to see Canada exacerbate that mistake.

They also point out that as part of its attempt to win Canadian political support for its free trade agreement with Colombia, Ottawa promised to produce an annual report on human rights in Colombia to assess whether free trade hurts or improves conditions. But no report has been tabled yet this year, despite a mid-May deadline.

The United Nations High Commissioner for Human Rights produces a separate report on Colombia every year. Its most recent edition states that there is reason to hope that human rights are improving as the peace process dealing with 40 years of internal violence takes hold.

But it also says the Colombian government needs to take responsibility for third-party violence, extra-judicial executions, disappearances, and land rights that are abused by companies in the mining sector.

Canada’s mining companies are front and centre in Latin America, but the senior official said Canadian firms are leaders in corporate social responsibility and in promoting improvements in living conditions and respect for human rights.