Social Policy in Ontario

Canada-EU deal will affect more than trade

Posted on May 10, 2010 in Debates

Source: Toronto Star — Authors: Ken Lewenza

It’s unsettling to know that even on the heels of the recent free-trade themed Canada-EU summit in Brussels, most Canadians haven’t a clue that our federal and provincial governments are negotiating with the European Union what could be the largest, most significant bilateral trade deal in history.

The lack of transparency in these negotiations has prevented meaningful public debate. In a twisted way, the absence of public debate has been misconstrued by media commentators as public complacency. In a more contrived way, neo-liberal and free market pundits conclude that Canadians finally understand the economic, social and perhaps even moral benefits of free trade.

This is hogwash. And as is the case with most trade deals, the devil is in the details. A closer look at the contents of the Comprehensive Economic and Trade Agreement (CETA) — released by the newly formed Trade Justice Network — confirmed the suspicions of a growing number of opposition critics that this deal has less to do with eliminating border tariffs for goods and everything to do with reforming the more contentious realm of government policy and domestic regulation.

The potential impacts of the CETA are sweeping.

Government procurement practices centred on local and/or ethical purchasing rules would be undercut, leaving governments open to possible lawsuits from private investors.

Public service contracts would be pried open to corporate competition. Longstanding national marketing and price-setting institutions like the Canadian Wheat Board, as well as economic development programs like the Ontario Green Energy Act could be dismantled.

Canadian intellectual property legislation would be overhauled. Our national telecommunications sector would be subject to increased foreign ownership and control. And it appears this is the tip of the iceberg.

Any government that proposed seismic policy shifts of this nature would certainly be subject to intense public debate and political backlash. Many of these rule changes — long sought by corporate lobbyists and private business interests — simply wouldn’t fly.

But the strategy employed by the ruling Conservatives has been to couch these reforms in a supposedly non-controversial trade deal with a community of nations that presumably enjoy a standard of living on par, if not better, than our own. Give it a fancy name. And move quickly to avoid major public scrutiny.

In fact, CETA negotiations have been moving at a torrid pace. The third round of talks concluded in Ottawa this past week with future rounds scheduled for both the summer and fall months. The aim is to have this deal wrapped up in 2011.

This is certainly an ambitious timeline for a deal that aims to shift the landscape on a range of national policies and one that, economically speaking, has no identifiable net benefit for Canada.

So far, this deal’s been sold (mainly to those in the business community) on the premise that it will unlock the doors to a highly lucrative, multi-trillion-dollar foreign market. This sort of rhetoric is baseless. Even a government-commissioned joint study (which estimated GDP growth of $12 billion by 2014) fails to account for the possible economic pitfalls of liberalizing public spending, such as the almost inevitable jobs fallout caused by increased foreign investment, among other overlooked variables.

Determining the value of this massive deal requires much closer scrutiny. And so far, it seems the closer we look the worse it appears.

Take current Canada-EU trade flows as an example. In 2008, Canada held an $18 billion trade deficit in goods with the EU, mostly in high value-added commodities. Our European cousins are primarily interested in purchasing our raw materials like gold, diamonds, oil, uranium, nickel and coal. In turn, we mostly buy back big-ticket items like aircraft, pharmaceuticals, turbines, machinery, wind generators and cars. In fact, for every $1 we sell in autos to Europe, they sell $15.

By the government’s own modelling exercise, Canada’s trade deficit with Europe will grow by a further one-third. This would essentially destroy — not create — many of Canada’s most well-paying industrial jobs.

Scott Sinclair of the Canadian Centre for Policy Alternatives argues persuasively in a recent paper that Canada is negotiating this landmark deal from a position of weakness.

For the European Union, a trade deal with Canada (a relatively small market) is surely not atop the priority list. Nevertheless, it does suggest a step forward for Europe’s own ambitious trade program, outlined under the 2005 Lisbon strategy.

It also sets a new bar for bilateral trade deals in a post-Doha (and perhaps post-multilateral trade) era, which Europe so hotly coveted. A Canada-EU CETA may be a mere consolation prize, or at least a circuitous route, to the much larger goal of landing a lucrative trade pact with the United States or North America proper.

But these are clearly high-stakes negotiations for Canada, and it’s high time the public was engaged in the debate. We have much more to lose than we stand to gain. These proposed policy reforms are not something most Canadians would readily accept.

So it makes sense that Canada’s free market ideologues, defenders of free trade and those committed to relentlessly push the CETA forward would think it not at all a bad thing that Canadians are left in the dark.

However, instead of professing to know what Canadians think about free trade — and a host of other issues, for that matter — they should probably just ask them.

< http://www.thestar.com/opinion/editorialopinion/article/806521–canada-eu-deal-will-affect-more-than-trade >.

Tags: economy, globalization, participation

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