LOS CABOS, Mexico – Prime Minister Stephen Harper leaves the G20 summit in Mexico with an invite to pull up a chair at major trade talks, and newfound confidence that Europe will take bold action to get its economic house in order.
The two-day summit in the Baja California peninsula closed Tuesday with leaders of the world’s 20 most important economies urging their European counterparts to break the vicious circle of debt-burdened banks and cash-strapped countries.
“Euro area members of the G20 will take all necessary policy measures to safeguard the integrity and stability of the area, improve the functioning of financial markets and break the feedback loop between sovereigns and banks,” according to a draft communique that has been making the rounds at the summit.
The prime minister told reporters he feels European leaders will take action.
“I am convinced that European leaders fully understand what needs to be done,” he said. “The issue is now acting quickly and dramatically to actually take those steps.”
Harper has been vocal in urging the Europeans to move swiftly to contain their debt crisis once and for all. The prime minister’s calls for action rankled some Europeans, who did not appreciate a lecture from Harper on how to balance their chequebooks.
That frustration boiled over when the head of the European Commission lashed out at those who try to tell the continent what to do but refuse to chip in any more money for a rainy-day rescue fund.
“Frankly, we are not coming here to receive lessons in terms of democracy and in terms of how to run an economy because the European Union has a model that we may be very proud of,” Jose Manuel Barroso said Monday.
“We are not complacent about the difficulties. We are extremely open. I wish that all our partners were so open about their own difficulties. We are extremely open and we are engaging our partners but we are certainly not coming here to receive lessons.”
Harper dismissed any suggestion of a spat.
“I think frank discussion is good,” he said. “But there has been a very broad and deep consensus among both European and non-European leaders about what needs to be done.”
Canada and the United States have refused to pledge any more money to the International Monetary Fund. The IMF is trying to raise $430 billion in case the economy tanks.
The European debt crisis loomed over the Los Cabos summit. People here breathed a sigh of relief this past weekend when Greek voters elected a new government that intends to keep the indebted Mediterranean nation in group of countries that use the euro as a common currency.
A rival party had threatened to tear up Greece’s huge bailout deal, which could have led to the country getting kicked out of the 17-member eurozone.
But even though Europe was at the top of everyone’s mind at the summit, behind the scenes Canadian officials were trying to wrap up a long-standing negotiation with the Americans.
Canadian officials met late into Monday night with representatives from the United States. The prime minister followed up Tuesday morning with a one-on-one meeting with U.S. President Barack Obama.
Harper then announced Canada has been asked to sit at the negotiating table for the proposed Trans-Pacific Partnership.
“Opening new markets and creating new business opportunities leads to jobs, growth and long-term prosperity for all Canadians,” the prime minister said in a statement.
“A TPP agreement will enhance trade in the Asia-Pacific region and will provide greater economic opportunity for Canadians and Canadian businesses.”
The announcement came a day after G20 host nation Mexico was invited to join the talks.
Nine countries are currently negotiating a free-trade pact that many feel will have more economic strength than the North American Free Trade Agreement. Canada and Mexico will join the United States, Australia, New Zealand, Peru, Chile, Singapore, Malaysia, Vietnam and Brunei in the trade talks.
The deal became even more attractive with Canada and Mexico now in the picture. The 11-country trade market now swells to 658 million people and a gross domestic product of $20.5 trillion.
With such a potentially lucrative trade opportunity dangling tantalizingly off their western shores, it’s no wonder Canadian officials stepped up their lobbying of the Obama administration to allow Canada into the talks.
“Inviting Canada to join the TPP negotiations presents a unique opportunity for the United States to build upon this already dynamic trading relationship. Through TPP we are bringing the relationship with our largest trading partner into the 21st century,” U.S. Trade Representative Ron Kirk said in a statement.
“We look forward to continuing consultations with the Congress and domestic stakeholders regarding Canada’s entry into the TPP as we move closer to a broad-based, high-standard trade agreement in the Asia-Pacific region.”
But Canada’s trade restrictions on dairy and poultry products presented the biggest obstacle to joining the talks. Canada has a supply-management system that controls milk and egg prices while setting prohibitively high tariffs on imports.
The federal Liberals called on the Conservatives to be forthcoming with all details of the trade talks, including Canada’s bargaining position on supply management.
Harper wouldn’t say if supply management was on or off the table.
“I’m not going to get into talking about specific areas or specific areas of our mandate other than to say Canada aims, whenever it gets into a trade negotiation, to promote and to protect all of its interests across all of the range of industries, including, obviously, the greater interests of the Canadian economy,” he said.
Queen’s University professor and trade expert Robert Wolfe said Canada’s entry into the Trans-Pacific Partnership shows economic power is shifting toward Asia.
“The emergence of China as a major player in all dimensions of global life — economic, diplomatic, military, cultural and environmental — motivates the current re-orientation of Canadian trade policy strategy,” Wolfe said in a statement.