Trade and Development: Canadian Tariffs and the Least Developed Countries

The Kananaskis Initiative was gazetted on the same day as the Conflict Diamonds Initiative, January 1, 2003. The Conflict Diamonds Initiative received more attention because it was one of Canada’s first Security Council initiatives; but the market access initiative has been arguably more far reaching because it led to long lasting growth and trade development in a handful of countries. That there is more to be done is clear, but the achievement is notable.

Over the past seventeen years, exports from several LDCs to Canada have grown and diversified, changing the profile of Canada from a traditional market for unprocessed minerals and raw food to a destination for imports of low cost, labour intensive manufactured merchandise. Bangladesh and Cambodia now rank after China as highest exporters of apparel to Canada, several others show continued growth in exports to the Canadian market.

Canada supports the LDCs in many ways including a large military and development presence in Afghanistan, in rebuilding Haiti, in promoting economic growth in Bangladesh and Ethiopia and so on. Further reducing or eliminating tariffs on LDC exports, particularly for small exporters to Canada is an important part of this work, but it is often a forgotten issue.

Critics of the LDC liberalizations may argue that just a few LDCs benefitted; supporters will maintain that tariff reductions usually benefit just a few countries. Both are right; more could be done to help LDC exporters in the 47 LDCs take advantage of the Canadian market, which is now wide open to them. More could be done to enable small exporters and producers benefit from the LDCT.

But in the absence of multilateral initiatives to open advanced country markets to first tier manufactures from the poorest countries, and with the failure of the Doha Round of Multilateral Trade Negotiations, the results of the LDCT liberalizations are a credible, and important contribution to development through trade.

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Fauzya Moore is an Ottawa-based consultant and writer, a graduate of Harvard’s Kennedy School, and former senior advisor on trade and development in Canada’s Department of Foreign Affairs, Trade and Development.

© Fauzya Moore, 2020