A historic trade deal between Canada and the European Union is hanging on by a thread. Faculty here at TRU are split on whether or not Canada has a good deal.
The deal, called the Comprehensive Economic and Trade Agreement (CETA), was signed on Oct. 30 by Justin Trudeau. But just a few days earlier, it was almost thrown out due to opposition by Belgium’s Wallonia region who feared competition from cheaper Canadian beef and pork imports. The deal still has to be ratified by the European Parliament.
The agreement between Canada and the European Union will eliminate 98 per cent of tariffs.
According to Belayet Hossain, an associate professor in economics, CETA would also allow for not just tariff elimination, but has systems in place for better investment, government procurement and regulatory cooperation. This differs from the agreement Canada has with Mexico and the United States through NAFTA, in that NAFTA focuses on tariff elimination and not other benefits offered by the European deal.
Hossain believes that the deal is good for Canada as it would give Canadians preferential access to a market of more than 500 million people. It will also diversify Canada’s trade, meaning the nation can rely less on the American market.
“Overall, the prairie provinces and B.C. benefit highly from this deal,” Hossain said, adding that the EU wants Canada’s forestry, seafood, minerals and agricultural products.
Hossain also believes that the agreement could potentially allow for more competition in the telecommunications sector, which is largely run by only three companies in Canada.
Although Hossain says it’s a beneficial agreement, there are concerns to be had, particularly with the domestic market on cheese and wine.
“EU cheese and wine will enter the Canadian market,” Hossain said, potentially threatening wine producers and Quebec cheese.
Political science professor Derek Cook is skeptical about CETA, believing that the agreement will give corporations more power and the government less control.
“From the corporate perspective, these trade agreements are to tie the hands of government so that corporate profit-making interests are not obstructed by the will of the people interested in health or the environment,” Cook said via email.
The agreement would also mean that patent regulations in Canada will change to match European standards. Hossain said that while a patent made in Canada would automatically be protected in Europe, patents will remain in place longer than they have in the past. This is because the agreement allows for a two-year “patent term restoration” addition to patents, according to a report by the Canadian Centre for Policy Alternatives.
According to the government of Canada, CETA will bring an extra $12 billion in revenue for Canada and increase trade by 20 per cent.
CETA has been in talks since 2009 and is Canada’s largest trade agreement since NAFTA.
The EU is Canada’s second largest trading partner after the United States and has a combined GDP of almost $20 trillion.