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opinion

The economic power struggle between the United States and China continues to escalate and is defining global trade discussions in all corners of the world. These turbulent trade times are causing countries to jockey for position by adopting policy positions for or against one of the two powers, or hedging their bets through multilateral trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

This reality is also reflected in the newly negotiated United States, Mexico and Canada Agreement (USMCA). Article 32.10 places restrictions on the ability of the three signatory countries to negotiate free trade with non-market countries.

While not specifically named, is seems the provision is aimed squarely at China and the fact that Canada has been courting the world’s most populous country in the hopes of striking a free-trade deal in much the same way other Commonwealth countries, such as Australia and New Zealand, have been able to do.

It appears the idea that its largest trading partner would strike a free-trade agreement with China is somewhat unsettling to the United States. But Article 32.10 is also unsettling to many north of the 49th who see it as an attack on Canadian sovereignty.

A number of analysts have stated that the United States is taking advantage of Canada by forcing that provision into the USMCA. For those who view the world as a cup half empty, that may be a valid argument.

But I actually believe this provision puts Canada in a position to do what we have done best for years on the international scene: broker a deal between parties that struggle to find common ground. Article 32.10 does not stop Canada from negotiating a free-trade agreement with China. Rather, it states that the United States and Mexico have the opportunity to comment and make suggestions along the way during that negotiation, reserving the right to walk away from us if they don’t like what Canada is doing.

The cup-half-full view sees this provision as one that puts Canada in a unique position to discuss global trade with the world’s two economic superpowers. While we may not actually bring both countries to the table with us, we will bring their views and broker discussions between the nations that likely wouldn’t take place without us.

The reality is, the United States and China have been doing their best to avoid sitting at the same table for broader trade discussions, even before the current administration took charge. In fact, the two super economies have been focused on setting themselves up in competing alliances. China is still considering joining the Regional Comprehensive Economic Partnership (RCEP) while the United States signed onto the CPTPP, before withdrawing a year later.

As the two powers continue to impose duties on each other’s exports, world leaders are trying to figure out how to best position their own economies to ensure they sustain the least negative impact in the event of an all-out trade war between the two powers and, more importantly, to ensure ongoing prosperity for their citizens in the years and decades to come.

Canada, as a member of the CPTPP and actively looking to sign a free-trade agreement with a group of countries tied to the RCEP, would have a unique perspective that could help bridge the gulf between the nations and tamper growing hostilities.

Our position as trade broker provides Canada an opportunity the likes of which we may not have seen since Nobel Peace Prize winner Lester B. Pearson stepped onto the world stage during the Suez Crisis and introduced peacekeeping to the world.

But Canada’s influence would also extend beyond brokering trade peace between the United States and China. Trade tensions between the American administration and the European Union are also growing. Canada was able to ratify the Comprehensive Economic and Trade Agreement (CETA) with the EU but a trade deal between the United States and the EU has collapsed. Once again, we can be the pivot point between the two sides and hopefully ease tensions.

If Canada can thread the needle on this, we would redefine our role on the global stage to that of economic peacekeeper.

Ambitious ideas? Maybe, but Canada has never been known to step back from tough situations. Our reputation and legacy as calm, thoughtful and reasonable to deal with has been built on events such as Vimy Ridge, Passchendaele, Rwanda and the Suez Crisis. Canada and Canadians stand to gain if once again we can broker a peace – economic this time – between two parties where tension is obviously mounting.

Canadians who have come before us gifted us a legacy other countries envy. The question now is whether we can live up to our legacy, not whether our sovereignty has been eroded.

Joy Nott is a Partner in the KPMG Canada Trade and Customs Practice and is the former President and CEO of the Canadian Importers and Exporters Association.

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