Canada’s Tariff Review: Not Woke, Broke

Table of Contents Canada’s Tariff Review: Not Woke, Broke End Notes About the Author Canadian Global Affairs Institute Canada’s Tariff Review: Not Woke, Broke In Bangladesh a garment worker can…. “rise at 4.00 am ….work for two hours on household chores then walks for an hour to the garment factory where she works until10 or 11 o’ clock at night. After another hour’s walk home she spends two hours on housework, after which she lays down at 2. a.m to sleep – for two hours.”1 Canada’s international feminism focuses heavily on integrating women in international trade. Development of women-run SMEs is a big focus. Unfortunately, Canada has overlooked a bigger issue. Its own protections against exports from heavily female industries in the developing world are some of the highest in the OECD. These industries are some of the highest value exports from developing countries to Canada, and Canada’s tariffs may suppress both trade-led growth and the wellbeing of millions of women in export-led industries in the developing world. Canada has an opportunity to focus on the issue this fall. Its General Preferential Tariff (GPT) and Least Developed Countries Tariff (LDCT) are under review. Finance Canada is quietly consulting on what to do about least developed countries (LDCs) which could lose zero tariffs if they are graduated from the LDCT. It is also proposing removing/graduating several other countries from GPT tariff preferences. The tariff reshuffle is triggered by UN reclassifications: Bangladesh, Nepal and Laos are no longer considered least developed countries. Several other countries have been graduated from lower middle-income status to upper middle-income status. If Canada follows international practice (it doesn’t have to), these graduations would maintain very high tariffs on exports from many developing countries and they could remove eligibility for zero-tariff treatment from others. A tariff is a tax on imports. High tariffs can destroy whole industries by increasing prices on goods, rendering them uncompetitive in export markets. Prime Minister Justin Trudeau’s rapid-fire response to Trumpian tariffs of 10 per cent on aluminum and 25 per cent on Canadian steel exports to the U.S. was in response to that threat. Tariffs also increase prices for consumers and/or depress wages in producing countries. Trudeau’s response was also intended to address the prospect of lower salaries and living standards in Canada