By design, free trade agreements tear down the protectionist walls propping up status quo producers. However, even those producers -- at least those who reform, will also find a newfound ability to thrive given increased access to markets with tens of millions, or hundreds of millions, of potential new customers. All of this benefits consumers, most obviously when expensive tariffs on their choices, from Korean cars to Canadian beef, are eliminated.
In the recent throne speech, the federal government announced a variety of initiatives but the one that drew much attention was its ostensible consumer-friendly tack. To help consumers, especially those with the lowest incomes, the federal government doesn't need to micro-manage airline tickets. It could instead focus on the big picture.
Whenever Canadians cross the border, it is inevitable they will find cheaper goods in the United States. There is a reason that helps explain part of the price differences: $3.6 billion in customs tariffs. All consumers would benefit from more competition and an end to anti-consumer tariffs. But more importantly, low-income Canadians would benefit the most.
Canada's entry into the Trans-Pacific Partnership negotiations last week has been hailed as a new direction for the country's trade policy. It would be wise for Canadian policy makers to also bring to the table new views on trade. Canada's position on trade has been based on clear national identities ("Made in Canada"). But countries are more and more relying on imported inputs to produce their exports. For instance, Canada produces only 70 per cent of its exports value at home, with imported inputs accounting for the remaining 30 per cent.