Canada Trade Deal With European Union: CETA May Benefit EU Over Canada, Officials Say

Eu Trade

First Posted: 10/17/11 05:56 AM ET Updated: 10/17/11 12:45 PM ET

As Canadian and European Union negotiators sit down Monday for the ninth round of talks on a sweeping and controversial trade agreement with the EU, The Huffington Post has learned European officials expect Canada will get the short end of the stick.

"At the moment Europe will be able to export more than what Canada will be exporting," Anna Robash, a Danish member of the European Parliament, recently said.

"We will gain a bit more," a European official closely linked to the trade talks also suggested.

"A good deal today is a win–win," he said. "But of course, there will be some losers, there are always losers."

Fears over which Canadian sectors will lose when the final text of the Comprehensive Economic and Trade Agreement (CETA) — the largest and most ambitious trade deal Canada has ever negotiated — is concluded weigh heavily on opposition politicians in Canada and industry groups who feel they have been left in the dark.

Will Canada trade too much away in exchange for preferential EU access to beef, fish and manufacturing exports? Will municipalities be banned from implementing 'buy local' policies? Will the deal open up public services to further privatization? Will foreign milk and cheese flood the domestic market and offset supply management in the dairy industry? Will CETA lead to higher drug prices through the introduction of tougher European patent protection legislation in the pharmaceutical industry? Will Canada’s copyright law be bent to European demands? Will jobs be lost?

Those questions have mobilized anti-trade groups such as the Council of Canadians and the Canadian Union of Public Employees (CUPE), who will demonstrate Monday on the steps of Parliament Hill wheeling a 14-foot tall wooden Trojan horse representing the agreement.

"This is one of the stupidest trade agreements Canada has ever seen," said Stuart Trew of the Trade Justice Network. "I think what we will lose out of this far outweighs any potential gains for limited sectors in Canada."

"Municipalities have become just bargaining chips so the Harper government can sell more fish," Trew said.

Anti-free-trade groups, however, aren't the only ones worried about the deal.

The Conservative government says CETA will provide Canada with preferential access to the world's largest single market, the European Union's 27 countries with a population of more than 500 million.

It will result in 80,000 new jobs, according to International Trade Minister Ed Fast.

"The potential benefits to Canadians under a free trade agreement with the European Union are immense," Fast told MPs on the International Trade committee earlier this October.

"Canadian businesses, workers and families in every region of our country will benefit from the tens of thousands of jobs that this agreement will create."

Trade deals might improve the quality of Canadian jobs, said Michael Hart, a trade policy expert at Carleton University’s Norman Paterson School of International Affairs, but they certainly don't increase the quantity of jobs.

"Trade agreements do not create jobs. Never have. Never will. But ministers have never accepted that economic insight," Hart said.

"A good agreement would probably be beneficial to Canada but there is just not enough in (CETA) to make it worthwhile," Hart added.

According to the trade minister, CETA would add $12 billion to the Canadian economy annually and boost two-way trade by 20 per cent.

Fast finds his numbers in a three-year-old study, completed before negotiations began, that assessed the potential impact of a closer partnership with the EU. The findings, however, assumed a closer integration in a whole range of spheres, such as government procurement, labour mobility and tariff-free trade in sectors such as automotive vehicles and parts and fish and seafood.

The study was not based, as the opposition points out, on what Canada or the EU is actually negotiating. For example, rules of origins might freeze out a large part of Canada's auto-sector because it is so closely intertwined with the United States, and affect the calculations.

While both the NDP and Liberal Party say they support the idea of diversifying Canada's trading partners, both parties are worried the federal government hasn't done its homework by preparing a real cost-benefit analysis of what it is prepared to negotiate.

"We haven’t seen enough details to convince us that the negative impacts that we are concerned about won't come true," said Robert Chisholm, the NDP's international trade critic.

Chisholm cites a study commissioned by the Canadian Generic Pharmaceutical Association published earlier this year which suggests that if Canada extends its patent protection for brand-name drugs, as the EU would like, the cost to the public health care sector would rise by close to $2.8 billion a year.

"Whether that is precisely the case or not, I think the point they are raising is that undoubtedly it will increase cost to the health care system," Chisholm said.

"We asked the trade negotiator (Steve Verheul) last November when he appeared before committee whether he had done any impact studies and he said no. I asked him again in this meeting if he had done anything further on this to examine the impact and he said no. That to me is a problem. What we are doing is we are kind of negotiating without really knowing what we might be trading away," he said.

Wayne Easter, the Liberal’s trade critic, said he is concerned the government and the department of international trade will sign a deal just for the sake of signing a deal.

"You should only sign a deal if you are net beneficiary," he said.

Easter doesn't know whether the Europeans are right about obtaining the winning hand in this deal because, he said, the federal government hasn't provided Parliamentarians with enough information.

Milos Barutciski, a trade lawyer with Bennett Jones who has been leading CETA updates and conferences with Verheul and business groups, believes Canadians shouldn't read too much into the Europeans' grandstanding comments.

"When the Europeans say there is good for everybody but we'll get out somewhere ahead. I kind of say, well yeah, what is a politician going to say? What is a trade policy guy going to say? They have to say they got the better deal. So I would just discount that," he said.

The 736 members of the European Parliament will have to vote on the trade deal when negotiations wrap up in what is expected to be the early part of 2012.

EU politicians on the left and right of the political spectrum raised concerns with HuffPost over key issues they would like to see addressed in the deal, as well as trade irritants such as Canada's liberal use of genetically modified organisms (GMOs) and the need to recognize geographical indicators.

"Your Canadian milk quota, for me is a big point, because we will go out of our quota in the European Union," said Elisabeth Jeggle, a former farmer and a German member of the European People's Party.

"I hope in the end we will have established and equal base, a fair base. We can give European products to Canada and Canada may send products to the European Union," she said.

(Canadian officials insist they have given nothing away on supply management although dairy has yet to be fully discussed and insiders believe it will be one of the last items on the table.)

"For me, some of the very important (issues) are labelling on goods, that you know where goods come from," said Robash, the Danish politician. "We also want to know if the meat ... has been fed by genetically modified organisms."

"We do not really see the need for GMOs. It is extraordinary expensive. I could understand if it was for scientific research, but for food? It makes no sense to me," she said.

"Then there is the protection of international property right, which is for us in Europe quite important. You know in Europe if a cognac, or champagne or cheese Roquefort or you name it, if they do not come from exactly that part of the country they cannot be called that. You can call it ham but you cannot call it this very famous ham from Italy, for example. Or this Roquefort cheese, if it doesn’t come from Roquefort, it is a blue cheese but it is not a Roquefort. It might even taste better," Robash said smiling. "But you are not allowed to call it that. And we get a lot of copy products from other places around the globe and for us that is quite important to see that traders are serious when it comes to that."

Some MEPs even said they believe Canada's appeal to the World Trade Organization (WTO) on the EU's seal parts ban could derail negotiations when CETA comes up for a vote.

"I must say that is not very helpful for the trade agreement because if you want a trade agreement with a partner, you should not have any conflicts at the WTO level. That is not helpful," said Jörg Leichtfried, an Austrian member of the Progressive Alliance of Socialists and Democrats.

"There are some colleagues who have already said that if that issue is not cleared there will be no agreement. I mean that is quite a radical position here but some are acting like that. And that has to be noticed I think," he told HuffPost in his office in Strasbourg, France where the European Parliament meets.

That, however, is a minority viewpoint expressed mostly by Green Party members.

For the EU, the agreement with Canada is an easy one to wrap up as Europe aggressively pursues bilateral trade deals in the absence of movement at the multilateral level through the grounded Doha talks.

Canada is seen as a good, friendly, closely-aligned partner where the EU can lay the groundwork for wider acceptance of its norms (such as business investment protection and intellectual property rights) and shape the terms of future agreements with other countries.

Phil Rourke, the executive director of the Centre for Trade Policy and Law in Ottawa, believes it is too early to say whether Canada is on the losing end of CETA.

"They (the EU) are in a stronger position, they've always been and nobody is denying that. We are the demandeur on this, we are the smaller economy and we asked for this and they have been playing the role of provocateur every time so I'm not surprised that they would be saying that," he said. "It's all positioning. It's a game… (But) are they going to reject a deal with Canada because they didn’t get enough?"

While European negotiators seem unwilling to go as far as Canada would like on items such as labour mobility, Canadian negotiators seem willing to bend on intellectual property rights, investment protection and recognition of some geographical indicators.

Regardless of the final outcome, when the federal government signs the deal, Parliamentarians will have few options at their fingertips.

Fast's press secretary Rudy Husny confirmed the trade deal would be presented to Parliament, but unlike their European counterparts, politicians in Canada won't have a chance to send negotiators back to the drawing board if they really don't like what they see.

The minister, however, promised the federal government won't sign a deal unless it benefits Canadians.

"We will only conclude a free trade agreement that is in the best interest of Candians," he said at the Commons committee this month.

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SiameseTrainer
...we are Sia..mese if you don't please..
09:34 PM on 10/17/2011
Well why should this trade deal be any better for Canadians than any of the other ones signed. Skrue the IWW what we really need is One Big World Corporation. Level the playing field, lets all be Peons, except for that 10% of light stuff that floats to the top.
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03:57 PM on 10/17/2011
I have never seen a trade deal yet where people didn't criticize it on the grounds that it would likely benefit one side more than the other.

And of course all free trade deals do. But that's not the point. The real question is will both sides benefit on the whole? And almost all the time the answer is yes.
07:52 PM on 10/17/2011
Exactly Blackrabbit, and this would not be the same as signing a free trade agreement like with the US. Taxes and wages are much higher in Europe (which is why everything is so expensive in Europe!), we have one of the lowest corporate taxes of the G20, the best place in the world to do business, skilled population and those elements could have European countries relocate many of their offices here.
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opprobrious
More speech. Less Flagging.
03:02 PM on 10/17/2011
I don't trust conservative Canadian negotiators to achieve anything other than a lower standard of living for more Canadians.
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04:00 PM on 10/17/2011
Harper has been in power six years, and yet Canada's economic performance has been superb compared to its biggest trading partners. The unemployment rate, for example, is a full 2% less than the U.S., and 3% once one compensates for the different methods of measuring unemployment.
05:25 PM on 10/17/2011
Oh please, give it a rest. Your boyfriend, Harper had his hands tied for those six years by only having a minority government. If Harper had had his way, this country would be worse off than we are now. Now that he has his majority, we will be worse off when he is done.
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HUFFPOST SUPER USER
opprobrious
More speech. Less Flagging.
07:06 PM on 10/17/2011
You make it sound like he's actually responsible for that. Last I checked Canada is in the position it's in chiefly because of its relatively sane banking regulations, it's debt to GDP ratio (thanks to the previous government) and the general demand for resources.
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stanschurman
12:15 PM on 10/17/2011
The problem with this government (ok, one of many problems) is that the cabinet consists of a bunch of lightweights who are there more for their loyalty to Harper and his ideology than for any expertise they might possess. There is probably not one portfolio for which the minister assigned to it is qualified. So, we have a bunch of yes men negotiating with people in the EU who are there for their expertise and who will take this lot of Conservative rubes for everything they're worth. But of course the government will tell us all what a fine deal it is...no details mind you, just take them at their word.
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12:09 PM on 10/17/2011
Remember the Avrow Arrow. Conservative governments will sell out Canadian workers in favour of corporations or the military/insustrial complex every time.
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04:01 PM on 10/17/2011
The Avro Arrow was 50 years ago. Anything in our lifetime?
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BCSLAVE
Got a key?
08:23 PM on 10/17/2011
The pipeline to the Texas refineries. Shipping raw oil to be sold back to us at a higher price and with little direct benefit (Jobs).
10:54 PM on 10/17/2011
Harpo and the rest of the Regressive Preservatives desperately want to turn the clock back 50 years!
05:53 PM on 11/01/2011
How about the Chapter 11 $130 million payout to AbitibiBowater in Nfld? How about the lame "resolution" of the softwood lumber fiasco? How about the fact that the US NAFTA negotiators couldn't believe what easy pushovers the Canadian representatives were?

There are many many more examples of the bad effects of so-called free trade agreements. One of the Europeans stated there are always winners and losers - guess who loses the most? (Hint: it ain't the 1%).
11:58 AM on 10/17/2011
"It will result in 80,000 new jobs, according to International Trade Minister Ed Fast." I wonder where Ed gets his numbers, if no one has made an impact study. Occupy Ottawa.
11:55 AM on 10/17/2011
The deal makes no sense, but knowing Harper I can see him signing the deal and saying 'This is a great step for Canada.' Claps will be heard, jobs will be created with many more to be lost.

Viva la Canada!
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BCSLAVE
Got a key?
08:26 PM on 10/17/2011
And when the final toll rings he will have run off into the sunset with envelopes of our cash and a fascist state to protect him from his victims of his greed. Viva La Canada!
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piceaglauca
The picture says it all....
11:45 AM on 10/17/2011
We don't need rules to prevent buying local. We can and we will buy our own products. If the trade isn't fair then the foreign products can sit on the shelf and retailers can cancel their orders. As in the US Buy America is a good theme to follow. It brings back the manufacturing of local produce lost to a competitive market. I will pay more but it keeps jobs here along with all the spin off so if Canada loses some ground to exports then the EU can lose some jobs to lack of exports. As for specialty areas in pharmaceuticals and dairy products etc., we will just have to wait and see the CETA report.
11:04 AM on 10/17/2011
Conservatives have always sold out CANADA when they have had a majority .
10:56 PM on 10/17/2011
Abssolutely!! That blowhard Mulroney sold Canada down the river with the FTA.
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10:55 AM on 10/17/2011
A lot of these trade agreements result in Canada not getting as much for it's raw resources and cuts out the manufacturing component domesticly. Finshed products are always more profitable.
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Adrian31
60% of the time, it works everytime...
10:35 AM on 10/17/2011
"A good deal today is a win–win," he said. "But of course, there will be some losers, there are always losers."


Canada always seems to be the loser when negitiating trade deals...
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02:51 PM on 10/17/2011
Canada has benefited immensely from its trade policies. We would be much poorer without free trade.
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Adrian31
60% of the time, it works everytime...
04:17 PM on 10/17/2011
If by "benefitted immensely" you mean our jobs have disappeared then you are correct.
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sgillhoolley
Occupy the discussion.
09:46 AM on 10/17/2011
Free trade sounds great on paper, but in practical terms it is being done far too quickly. It makes absolutely no sense for a nation with a high cost of living to get into a free trade deal with a nation that has a low cost of living. The people in the low cost nation can work for far less wages than the people in the high cost. It will impoverish those in the high cost nation, and the past thirty years have shown that it is not that likely to enrich those (the majority) in the low cost nation. Oh, the rich will get richer, no doubt on that, but the average people will probably see a net loss. Free trade needs to be done more incrimentally, allowing the nations that engage in it to slowly move toward a common ground, where costs are reduced for the group that sees their wages drop, and costs increased where the wages go up.
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piceaglauca
The picture says it all....
10:55 AM on 10/17/2011
Capitalism doen't work that way.
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02:53 PM on 10/17/2011
You are confusing the theory of absolute advantage with the theory of comparitve advantage. Only the second is given credence by economists.
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CarlyQ
Without followers, evil cannot spread.
09:29 AM on 10/17/2011
Apparently Conservatives are capable of learning nothing. NAFTA - brought in by the cons under Mulroney - has proven itself to have been more detrimental to Canada and it's population than it was beneficial.

Now another Conservative government is going to do the exact same thing. Again.

The government of Canada is supposed to be about the PEOPLE, not corporations.
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piceaglauca
The picture says it all....
10:57 AM on 10/17/2011
What choice do they have in this process?
aintnoliberalnow
Old,cranky and retired
09:15 AM on 10/17/2011
Do the terms NAFTA and, GATT ring a familiar note? These two trade agreements have done nothing but solidify the political and financial power of the multi-nationals while costing us jobs and declines in our overall standard of living. Pardon me if I am just a little skeptical of another trade deal done for our "benefit" by a government that seems adicted to splashy PR and puckering towards the backside of big business.
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walkerhds
08:56 AM on 10/17/2011
anytime someone involved in trade negotiations says, "well, there will be winners and losers, there are always losers"; and some political hack says, "it will add 80,000 new jobs"; figure you are going to hear a massive sucking sound while the hack and his buddies line their pockets.
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sgillhoolley
Occupy the discussion.
09:49 AM on 10/17/2011
Yes, 80 000 new jobs, countered by 300 000 lost jobs. And those 80 000 jobs will be lower paying, probably mostly part-time to avoid having to give benefits. The people are speaking, and they are making it clear that the direction the elite have been driving our world is the wrong one, and that we want to reverse course. They better figure it out soon if they expect to stay as the elite.
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walkerhds
11:55 AM on 10/17/2011
exactly