Given the uncertain times our economic system is going through these days, with the United States ending the Trans-Pacific Partnership and their talks to make a trade deal with the European Union [EU], the visit of the Prime Minister to the European Parliament has been seen as a positive move by Canada to bring more stability to the international economy.
The European parliament has passed the Comprehensive Economic and Trade Agreement [CETA], the somewhat controversial EU-Canada free trade deal, which aims to eliminate 98% of tariffs on exported goods, making it the EU’s most comprehensive trade deal ever. It is hoped that the deal with Europe will help to offset, to some extent, threats to the Canadian trading system caused by Trump’s avowed intention to re-negotiate the North American Free Trade Agreement [NAFTA].
Trade between Canada and the EU amounts to more than $83 billion a year, and projections by the EU indicate that this could be increased by almost 20% following the signing of CETA. Although almost all tariffs are removed under CETA, there are some sectors excluded from the agreement, among them some agricultural products, including dairy, which is heavily subsidised here. European media report that CETA also has some troubling aspects, particularly “provisions allowing companies greater access to public contracts and sustainable development clauses, prompting some MEPs in the green and socialist political groups in the European parliament to claim it will lead to the wholescale privatisation of the public sector.
Unlike classic trade deals, CETA harmonises regulations on matters such as health and the environment.”
The timing of CETA may be fortuitous for Canada. It was almost in trouble last October, when the Walloon Parliament in Belgium tried to have it blocked by the national parliament. But, in the face of recent American criticism of both the EU and international trade deals, Justin Trudeau’s visit to the European Parliament the day after CETA was approved, has put Canada in a very positive position in terms of European attitudes.
Guy Verhofstadt, the leader of the ALDE liberal group, said: “President Trump has given us another good reason to intensify our links with Canada. While Trump introduces tariffs, we are not only tearing them down but also setting the highest progressive standards.” The trade agreement took more than eight years to negotiate, and, in comments to reports in Brussels, the Prime Minister said CETA would likely be ratified by Canada by the spring. Much is riding on the success of CETA for all sides, as the PM said: “If we are successful, CETA will become the blueprint for all ambitious, future trade deals. If we are not, this could well be one of the last.”
