Economic Turmoil...Try Free Trade

The US debt ceiling crisis may have been averted, regardless S&P intends to downgrade the US AAA rating meaning it will cost more to service the existing debt and to borrow more money. This combined with the massive plunge in the markets yesterday indicates investors are still worried about the US and EU debt crisis that are still looming.

More of a concern to Canada would be an American default as 78.9% (2008) of all exports are destined for America, making the American market vital to Canada, an exporting nation. The scare tactics are out that if or when America goes down, Canada will follow. What possibly can the Canadian government do to avoid economic turmoil with the source of the problem a foreign nation?

Interestingly enough, the government already created an economic insurance policy for Canada and continues to do so. Mainly and simply through signing and working on free trade deals with countries aboard. The Harper government has introduced free trade deals with Latin America countries which have some of the highest GDP growths in the world.

Additionally, the government is working on a free trade deal with the EU and "relations" that could include freer trade with China. In 2008 when talks with the EU and Canada began, EU officials stated that within the first year of a free trade deal a "minimum of $40 billion dollars per year" would be exchanged. Impressive seeing $440 billion dollars per year is traded with America alone.

Free or freer trade with China would be even more beneficial as Chinese growth is hungry for limited resources, all of which Canada has (coal, oil, lumber, etc). For the first time in history, Canada sold more lumber at a higher rate to the Chinese than to the Americans in the second quarter of 2011.

The Harper government was introducing proactive steps before the crisis in 2008 and 2011 hit, allowing Canada to weather the economic storm with relative ease. The old saying of not putting all your economic eggs in on economic trading partner's basket proves true.

Let’s make the market freer, allowing continued economic stability and growth for Canadian businesses and workers alike.