Canada Navigates Choppy Waters Amidst Global Trade Tensions

Canada Navigates Choppy Waters Amidst Global Trade Tensions

[By: Noella Ovid] – As a nation deeply ingrained in global trade, Canada faces a challenging year ahead, navigating through a sea of international conflicts. Trade expert Mark Warner, from MAAW Law, sheds light on this predicament in a discussion with the Financial Post’s Larysa Harapyn.

Global Trade Tensions and Canada

“Canada is sailing in turbulent waters due to worldwide unrest,” Warner commented. The nation finds itself in the crossfire of escalating trade disputes, particularly between its largest trading ally, the United States, and China. Warner foresees Canada being inadvertently impacted by these tensions, especially as the U.S. intensifies its export control measures.

Canada-China Relations

The relationship between Canada and China is complex and multifaceted. While Canadian exports like coal and agricultural products continue to flow into China, recent shifts in Ottawa’s investment regulations, particularly concerning takeovers in critical mineral markets by Chinese and state-owned enterprises, have stirred the waters. “This certainly complicates our interactions with China,” Warner noted.

Challenges with Other Trading Partners

Warner also highlighted Canada’s trading challenges with countries like India, which could hinder its participation in the Indo-Pacific Economic Framework for Prosperity (IPEF). “Our diplomatic hurdles with India suggest a delay in joining the IPEF,” he explained. Additionally, longstanding disputes over various sectors, including softwood lumber, dairy, auto, and technology, persist with the United States.

Digital Services Tax and Potential Repercussions

Canada’s recent move towards implementing a digital services tax, ahead of the Organisation for Economic Co-operation and Development (OECD) establishing multilateral rules, could provoke a response. “The U.S. has hinted at potential retaliatory measures under the USMCA if we proceed with this tax,” Warner stated, highlighting the delicate balance Canada must maintain in its trade relationships.