PANAMA CITY - Canada will proceed with a flurry of free-trade deals because the dream of one big global trade arrangement appears "stalled," Prime Minister Stephen Harper said Tuesday.
He made the remarks at a signing ceremony at the presidential palace in Panama, which became the eighth country to reach a free-trade agreement with the Harper government.
Canada exported a mere $128 million to Panama last year - but that country's economy is growing at a blistering pace, with a 9.2 per cent increase last year despite the global recession.
The deal fits the step-by-step strategy now being pursued by the Harper government.
That piecemeal approach will help fill the vacuum left by the apparent collapse of the Doha round of global trade talks at the World Trade Organization.
"I agree a number of these agreements are small, but if you add them up they become larger and larger," Harper told a news conference.
"We've all recognized for some time that the future of the Doha round is uncertain. I think we've been operating on that assumption almost from the beginning. That doesn't mean to say it's hopeless - but certainly it's stalled."
Harper said he believes a similar conclusion may be motivating the European Union in seeking a free-trade deal with Canada.
Agreements with India, South Korea, and a number of countries in the Americas are also in the works.
Harper noted that Canada had only five bilateral trade agreements when his Tories took office in 2006 - a situation he called unacceptable for a country that relies so heavily on international commerce.
The United States appears to have slowed down the pace of its trade negotiations and Canada could pick up the slack, he said.
"As much as I try and encourage the United States and our other allies to remain committed to open markets and oppose protectionism, we see some slowing down of the trade initiatives from that country," Harper said.
"This is an opportunity for Canada to get out ahead. And that's exactly what we're doing - here and in Colombia and elsewhere in our hemisphere."
While Canadian merchandise exports to Panama were a mere $128 million last year, the modest sum represented a 48 per cent increase from the previous year.
Harper saluted Panamanian President Ricardo Martinelli on his recent landslide election win, and expressed his delight that the conservative president campaigned on a promise of trade liberalization.
"You talked about the need, especially during these difficult times, to open doors to neighbours and allies," Harper said.
"I couldn't agree more. We must remember that the prosperity generated around the world in the last part of the 20th century and the beginning of the 21st has been unprecedented in human history."
"Removing protectionist barriers and easing trade restrictions helped to usher in this extraordinary era."
The Canada-Panama trade deal must be approved by Parliament.
Once enacted, it would immediately eliminate more than 90 per cent of tariffs on Canadian exports like potatoes and other agricultural exports, and high-tech machinery like flight simulators. Other tariffs would be eliminated within 10 years.
Canada has been busily pursuing trade deal with individual countries and small groups of countries while larger-scale liberalization talks - including the proposed global WTO deal and a Free Trade Area of the Americas - appear stalled.
Canada has reached trade deals in recent months with four European countries and Peru. Agreements with Colombia and Jordan have also been signed but not yet implemented.
After a visit to the palace, and a news conference, Harper toured the Panama Canal before heading back to Ottawa.
The expansion of the world transport hub is a key element of the economic growth forecast for this country over the coming years.
Panama's economic boom has stemmed largely from banking, shipping and services related to the transport sector.
Harper began his Latin America trip Sunday with a North American leaders' summit in Mexico.
At that meeting, he talked up Canada's pursuit of trade treaties and warned of the dangers of protectionism.
Sources inside the meeting said he has raised those fears so often with Barack Obama that, on Monday, he prefaced his remarks to the U.S. President by saying: "I hate to sound like a broken record. But I feel strongly about this issue."
Update:CORRECTS $5.7 billion details; RECASTS throughout
Eds:Will be updated.
CP Financial And Business Service, Institution, Real Estate, Business, Politics
Quebec's Caisse de depot first half gains wiped out huge real estate loss
THE CANADIAN PRESS
MONTREAL - Canada's largest pension fund manager, the Caisse de depot et placement, is revamping its real estate arm after $5.7 billion in losses, mostly in real estate, during the first half of 2009 wiped out other investment gains.
The Quebec pension fund manager said $4 billion of the losses were in real estate, including riskier commercial loans. It also lost $1.3 billion from private equity and $400 million in asset-backed commercial paper.
"Overall, our performance for the first half of the year was neutral, notwithstanding the impact the $5.7 billion of writedowns, 70 per cent per cent of that associated with real estate," CEO Michael Sabia said in a conference call with reporters.
As a result, the Caisse said it was withdrawing from certain types of high-risk real-estate loans, including mezzanine loans and would merge its commercial business with the hotel and residential operations.
"Today's announcement substantially repositions our real estate business to address many of the very challenging conditions that we find in the U.S. market, especially in the U.S. commercial real estate market," Sabia said.
The former Bell Canada (TSX:BCE) boss, appointed as the Caisse's first anglophone president in March, said the update was an effort to improve the large institution's transparency.
The Caisse was heavily criticized for its stunning losses in 2008, when the value of its assets plunged 25 per cent to about $120 billion.
Some of the pension fund giant's losses reflected its risky investments, including a move into asset-backed commercial paper.
PLEASE USE THIS ID NUMBER 'MARK ALT-I'
Oil-Prices, 2nd Writethru Bgt
Update:UPDATES with final settlement price; ADDS EIA data.
CP Energy And Resource, Energy, Exports, Imports, Retail, Institution, Prices, Business
Oil prices fall as U.S. Labour Department report suggests pay may not improve
By Dirk Lammers
THE ASSOCIATED PRESS
Energy prices slumped Tuesday on a U.S. Labour Department report that suggested consumer spending, a major economic driver, may be depressed for some time as companies cut back.
Benchmark crude for September delivery fell US$1.15 to settle at $69.45 a barrel on the New York Mercantile Exchange. It was the fourth straight day of declines and the first time this month that the price for crude dipped below $69.
The national average for retail gas in the United States fell for the first time in three weeks.
Oil prices have ended the week higher for five straight weeks, a period that coincides with earnings reports from U.S. companies. The results appeared surprisingly healthy, which gave energy prices a boost on the belief that the recession has loosened its grip.
While that may be true, data from the Labour Department Tuesday again showed that company profits were in many cases buoyed by less spending on employee pay.
The Labour Department reported that productivity, the amount of output per hour of work, rose at an annual rate of 6.4 per cent in the April-June quarter.
In normal economic times companies might pay more for workers and increase production. Yet companies during the recession have instead frozen hiring and cut hours to prop up profits.
If workers are not getting the hours they need, the pullback on spending for everything from gasoline to products made from petroleum, will likely remain depressed.
That has already happened this year.
The Energy Information Administration in its short-term energy outlook Tuesday said U.S. consumption of liquid fuels will fall by 4.1 per cent this year. The falloff in gasoline sales has been tempered somewhat because it's become so cheap compared with past years.
The average pump price fell two-tenths of a penny overnight to $2.643 per gallon or the equivalent of about 70 cents per litre, according to auto club AAA, Wright Express and Oil Price Information Service. That's about eight cents higher than last week but around $1.17 cheaper than at this point last year.
In fact, you'd have to go back as far as 2005 to find gasoline so cheap at this time of year.
Pump prices have followed crude upward for several weeks, however.
In Canada, the price at the pump averaged C$1.017 per litre, up from $1.004 per litre a month ago, but down from $1.309 per litre last year, according to price-watching website GasBuddy.com.
Crude prices rose early in the day on reports from China that the nation's exports, retail sales and factory output improved in July, and the country imported a record 4.6 million barrels of fuel a day last month.
The market reversed course when the Labour Department released its report and oil prices fell two per cent.
The monthly forecast by the Organization of the Petroleum Exporting Countries also may have helped pushed energy prices down. OPEC - responsible for about a third of the world's crude production - said it expected demand to fall by 1.65 million barrels a day this year, compared with last year, before rising in 2010.
The U.S. Federal Reserve on Tuesday begins a two-day meeting that could shed more light on the U.S. economy. An interest-rate hike is highly unlikely, but people want to hear what the Fed will say about the state of the economy, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
"By and large, we're just taking a little of this economic optimism out of the market right now and responding to the possibility that we're going to see a more stable currency environment going forward," he said.
The falling U.S. dollar has helped push crude prices up because oil is priced in the U.S. currency.
The EIA predicted Tuesday that gas prices will average around $2.34 per gallon in 2009.
In other Nymex trading, gasoline for September delivery gained 1.38 cents to settle at $2.9422 a gallon and heating oil fell 1.59 cents to settle at $1.9117. Natural gas for September delivery fell 10 cents to settle at $3.541 per 1,000 cubic feet.
In London, Brent prices fell $1.04 to settle at $72.46 a barrel on the ICE Futures exchange.
Associated Press Writers Alex Kennedy in Singapore, George Jahn in Vienna, Joe McDonald in Beijing and Martin Crutsinger in Washington contributed to this report.
TSX: ECA, TSX:PCA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN