Canada should focus its limited resources on improving access to the U.S. market and those with potentially large payoffs, rather than trying to complete a host of free trade, says a C.D. Howe Institute report.

The report was published yesterday even as Ottawa suspended softwood lumber talks to protest the U.S. refusal to abide by an August 10 ruling favouring Canada’s position in the long-running fight by a North American free-trade agreement dispute resolution panel.

The U.S. accounts for 85% of Canadian exports.

“The recent wave of U.S. free trade agreements, including the Central America-Dominican Republic agreement that Congress ratified in July, will have relatively minor direct effects on Canadian interests,” says C.D. Howe senior policy analyst Danielle Goldfarb, who wrote the report.

She says that the best strategy for Canada is to “focus in areas likely to produce the largest payoffs for Canadian interests while minimizing risks and costs.”

Maintaining and improving access to the U.S. market must be Ottawa’s overwhelming priority, Goldfarb says. “This means removing barriers to flows of goods and people that are inconsistent with the highly integrated Canada-U.S.
economic space.”

Canada should also maintain its support for current World Trade Organization multilateral negotiations, the report says.