POLITICS

U.S. Chamber supports Canada's efforts to join free trade talks with Asia

06/12/2012 04:31 EDT | Updated 08/12/2012 05:12 EDT
MONTREAL - The U.S. Chamber of Commerce supports Canada's entry into Trans-Pacific Partnership negotiations for a free-trade agreement with lucrative Asian markets, the powerful business lobby said Tuesday.

Chamber president Thomas Donohue said the business group strongly favours Canada's participation, adding that the United States and Canada could help boost the world economy and promote global stability.

"The best opportunity is the Trans-Pacific Partnership," he said in a statement.

The U.S. and eight other countries — Australia, New Zealand, Chile, Peru, Vietnam, Malaysia, Singapore and Brunei — are currently hammering out a free-trade agreement.

Canada, Japan and Mexico have spent months attempting to convince the White House to grant them admission to the talks.

Canadian Natural Resources Minister Joe Oliver welcomed the business lobby's support.

"That is helpful and a positive development," he told reporters after speaking Tuesday to the International Economic Forum of the Americas in Montreal.

"We see that opportunity as important and consistent with the strategic objective to diversify our market."

Canada is in talks with the European Union and has had bilateral discussions with many countries in its bid to boost free trade with Asia, which is "absolutely fundamental to where we want to see trade increase," Oliver added.

In the run-up to the G20 summit in Mexico this month, questions about TPP have become more urgent in the face of vague responses from the Obama administration. It's been the dominant bilateral issue privately between Canadian government officials in Washington and their U.S. counterparts.

Donohue told the economic conference that Americans take Canada for granted partly because they view their neighbours as family, but added that the continued strengthening of the world's largest trading partnership is key to creating wealth and jobs.

"We'd never treat our friends that way and we take this relationship somewhat for granted, I think on both sides, and I think we have to work very hard on that."

He said that few Americans are likely aware that Canada is the United States' largest foreign source of oil and that $1.6 billion worth of goods cross the border each day.

Canadian Chamber of Commerce president Perrin Beatty said more work needs to be done to remind Americans about the importance of the relationship, not just when a key oil pipeline — like TransCanada's (TSX:TRP) controversial Keystone expansion — needs government approval.

"Binational relationships, like marriages, require work. You take them for granted they fall apart," he told a panel discussion.

"We should have been engaging the U.S. in a very public way long before Keystone in terms of how we work together to ensure energy security and the prosperity of North America."

"You're late in the game when you start engaging after domestic lobbies start going after you. You need to talk about the relationship much earlier than that."

Donohue praised Canadian policy decisions, especially in promoting domestic energy development.

The vocal critic of U.S. President Barack Obama said both countries need to encourage, rather than discourage, domestic energy production.

"The U.S. should develop every drop of energy of any type that we can," he said.

Both chamber presidents rejected the view of some critics that business is part of the problem, representing the one per cent whose wealth has far outpaced average workers.

Donohue said that view has been propagated by governments, the media and interest groups.

"The middle class is a lot better off than the middle class used to be," he said, acknowledging that household income hasn't kept pace.

He blamed this on the massive increased burden on companies to pay benefits such as pension, health-care cost and taxes.

Beatty said the best way of reducing the gap between rich and poor is through economic growth.

"I don't think in Canada that most people focus on how do we divide up the pie, but I think their great focus is how do we create opportunity," he said.

"That's how I think you break down these barriers, not through demonstrations or artificial attempts to do so."