Who should have more authority in economic affairs, the Canadian government or an international organization, such as the IMF or the World Trade Organization? Why?

The Canadian government and international organizations have different spheres of economic activity and need to work collaboratively in those areas where their interests overlap.

Expert Answers

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Asking whether the Canadian government or an international organization such as the IMF or the World Trade Organization should have more authority in economic affairs creates a false dilemma. None of these organizations has authority over all elements of the economy. International organizations are involved when Canada trades with other nations and address internal economic issues only in so far as they impact external trade. The Canadian government is responsible for matters internal to the Canadian economy but also is involved in Canada's role in world trade.

Trade deals can be bilateral, regional, or multilateral. NAFTA and its successor, USMCA, for example, address issues of North American trade and were negotiated by the governments of Canada, Mexico, and the United States. Canada also has several bilateral trade agreements and is a member of the Commonwealth. Canada is also a member of the IMF and WTO.

Where Canada does not have other treaties, it trades under WTO standards. To retain its membership in the WTO and trade under WTO arrangements, it must follow WTO guidelines and regulations, including ones regarding subsidies. The benefits to these guidelines include limits on tariffs, which benefit Canadian exporters. Neither the WTO nor the IMF have authority over Canadian economic affairs, but rather the Canadian government chooses to abide by their guidelines in exchange for the benefits of being a member, trading under their guidelines, and having the right to appeal when other countries violate those guidelines.

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