Is A Canada-EU Trade Agreement Really That Important For Ontario?
By Randall White
The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) has been running since 2009, without ever quite making it to anything like a finish line.
International Trade Minister Chrystia Freeland walked out of intractable talks with the regional government of Wallonia in Belgium last week. Wallonia had last-minute objections to the EU Council’s signing the agreement along with Prime Minister Justin Trudeau on October 27. It remains to be seen if there will be enough movement to make a deadline this week.
This latest thickening of the plot has once again raised the question of whether all the effort two Canadian governments have now expended will ever prove seriously worthwhile.
Some would argue this question is especially poignant in Ontario, Canada’s most populous province.
Prime Minister Trudeau and the EU Council may or may not still sign some almost final CETA deal in some not too distant future. Yet, whatever happens, new trade-agreement critics (including Bernie Sanders and Donald Trump in the USA) are raising fresh doubts about this once widely praised public policy brand.
As matters stand, even EU President Donald Tusk has moaned: “If we are not able to convince people that trade agreements are in their interest… I am afraid that CETA could be our last free trade agreement.”
From the start, the Canada-EU trade negotiations that began in 2009 arguably had more political importance for the Stephen Harper government than immediate practical significance for today’s Canadian economy.
(In 2015 some 80 per cent of Ontario merchandise exports were still going to the United States. About six per cent went to the UK, but China and Japan together took more than three per cent, while only over two per cent went to France, Germany, Italy, and Norway combined — and Norway is not an EU member.)
In September 2014 then Prime Minister Harper and European officials signed an initial conclusion of CETA negotiations. When the Trudeau government took over in Ottawa, it carried on with a slow moving “legal review” of draft texts.
The review was completed at the end of February 2016. It included some nuanced re-tooling of the draft texts, supervised at the Canadian end by the hard-working Chrystia Freeland.
By this point, however, CETA was acquiring increasing numbers of critics in Europe and Canada.
Some European critics see the agreement as a Trojan horse for American multinational corporations in Europe — softening the ground for the Transatlantic Trade and Investment Partnership (TTIP) already being negotiated by the United States and the European Union.
The European critics in the limelight right now are from the francophone Walloon region of Belgium. According to the Associated Press, they fear CETA “would over-expose some sectors to cheap imports.” There have also been concerns from Bulgaria and Romania, worried about Canada’s visa requirements, although there are some reports those may have been resolved.
A German court only recently gave its blessing to CETA, in response to a legal protest from German free trade critics. In a recent Austrian Society for European Politics poll, 73 per cent of Austrians opposed the deal. Only 11 per cent were in favour, and 16 per cent were undecided.
Canadian critics include such usual suspects as The Council of Canadians. It characterizes CETA as “a way to further deregulate and privatize the Canadian economy while increasing corporate power and undermining Canadian and European efforts to address the climate crisis.”
Another usual critical suspect, Jerry Dias, national president of Unifor, added another wrinkle this past June. The United Kingdom’s Brexit decision to leave the European Union, he urged, “has thrown a wrench into the implementation” of CETA.
As Dias explained: “The reality is our number one trading partner in (the) EU is the United Kingdom, which accounts for more than 40 per cent of all our exports. If you’re going to take the UK out of CETA, it’s like buying a car without an engine.”
Jerry Dias is skeptical as well about CETA and the Ontario auto sector, as are other regional free trade critics. He is happy that Ford Canada CEO Dianne Craig has said the deal “helped to expand production of the Edge here in Canada for the European market.” But he doubts “the volumes would be large enough to justify CETA.”
Finally, even if Justin Trudeau does sign an approval by the EU Council in the not too distant future (after Belgium and so forth do come on board), there will still be further hoops ahead.
As explained on the EU website: “Following a decision by the Council, it will be possible to provisionally apply CETA. Its full entry into force will be subject to the EU's conclusion, through a Council decision with the consent of the European Parliament, and by all Member States through the relevant national ratification procedures.”
It does all make you wonder yet again: will the attention two Canadian federal governments have lavished on the Canada-European Union Comprehensive Economic and Trade Agreement ever take the Ontario and Canadian regional economies to some seriously worthwhile new promised economic land?