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Canada-EU free-trade: Here’s your briefing book. Don’t leave it somewhere.


 

Highlights from the two-year (really-badly-)hidden agenda:

Joint communiqué from Canada’s prime minister and EU president Merkel after the Canada-EU summit, vowing to “study…a closer economic partnership.” “Leaders will review the results of this study at the 2008 Canada-EU Summit with a view to pursuing balanced and closer future EU-Canada economic integration.” That 2008 summit is today.

Column in Maclean’s by A. Fellow, dated Aug. 30, 2007, on Canada-E.U. free trade. “The Quebec premier is working closely with Ottawa to get the Europeans interested in a transatlantic, Canada-EU free trade accord. The payoff would be tremendous: guaranteed low-cost access to a European market of a half-billion people and an economy the size of the United States’; new investment; new workplaces for skilled Canadians overseas; new skilled manpower for labour-starved Canadian employers.”

Website of the Canada-Europe Roundtable for Business, featuring a “Declaration in support of a Canada-EU Trade and Investment Agreement signed by over 100 Canadian and European chief executives,” back in June, 2007;

Agenda for a two-day Public Policy Forum conference on Canada-EU trade this past May, featuring David Emerson, Jean Charest, and the EU representative in Canada, Dorian Prince. CBC radio had a reporter there for two days; CPAC filmed the whole shebang and filled at least one weekend with excerpts. Charest’s keynote address was widely covered. So was his birthday party afterward, which Stephen Harper crashed in an attempt to make nice.

Article in Le Devoir, Feb. 23 2008. Article in Le Devoir, June 1 2007. Op-ed by the head of the Conseil du Patronat du Québec, October 2007. Bulletin from the Monnet chair in European Studies at the Université de Montréal, May 2007, summarizing speech by Germany’s ambassador to Canada on progress toward a Canada-EU trade accord. A slew of stuff from the incredibly prolific Canadian Council of Chief Executives.

Yeah, this thing really came out of nowhere.


 

Canada-EU free-trade: Here’s your briefing book. Don’t leave it somewhere.

  1. I also found an Oct 6 aricle by Peter O’Neil Canwest News and Matthew Little, Epoch Times, Sept 18.

    The coverage is a little confusing. Some sources say the negotiations started 18 months ago but Epoch Times article says they have been negotiating for only a couple of months.

    I agree with Chris, on the other thread, that a trade deal would never be finalized within 18 months. That’s blue sky thinking if I ever heard it because EU countries do not act as one and there is significant resistance to more trade deals within EU.

  2. Okay, I’ve just had my Homer Simpson moment–information overload + indifference + cognitive dissonance = doh!

  3. Sorry Paul. It seems like this should have warranted more media attention. I missed any mention of it, but then, I wasn’t digging.

  4. “Leaders will review the results of this study…”

    I can’t help but note you didn’t link to this study. An oversight or does it not exist?

  5. This is a brilliant opportunity and if we played our cards right we could become a gateway between the USA and the EU and then if a little value is added on the transfer of goods and services between all 3 of us we would literally be sitting in a marvelous cat bird seat as they say! Way to go Stevie keep up the good work.

  6. “When Harper and Merkel announced their feasibility studies in early June, Charest thought it was pretty thin beer. But an EU official in Ottawa told them the language had to be weaker than the actual level of interest because Europe is still, officially, praying for success in the Doha global trade round. ”

    And there you go, Mr. Wells. You hit it on the money a year ago. The Canada-EU-FTA only became news (sort of) when the Doha trade talks failed completely.

    Furthermore, a lot of those sources use terms like “economic cooperation”, “economic ties”, etc. Not “Free Trade”. Also, Le Devoir is in French, and noone outside of Ottawa and Montreal is bilingual.

    Furthermore, I regularly read Polish newsmagazines, and have seen no mention of trade negotiations with Canada there.

    Look, the price of this agreement seems to be a free hand in bidding for our public services on the part of the EU. That’s pretty f-ing huge. Just like NAFTA guarantees oil exports to the US while Canada freezes in the dark, so this exposes domestic companies to foreign competition.

    Consider nuclear. Ontario would have to consider giving Areva an honest chance to bid on building new nuclear units. Of course, AECL is located in Ontario, and generates jobs there. AECL needs to have Ontario buy a new Advanced Candu Reactor.

    And that’s just one example. This was a serious issue that needed to be examined and debated during the election. Why didn’t anyone talk about it?

  7. Hiding it in plain sight. Brilliant tactic, Paul. You thought you were so clever. “Le Devoir”. Is that even a word?

  8. Pete basically gets it, although I think we’re on different sides of whether “exposing domestic companies to foreign competition” is a good idea.

    As for why nobody talked about it, well, welcome to Canada. Stephen Harper also has a $990 billion defence policy that got mentioned precisely zero times, except by me when I felt like complaining that it wasn’t being mentioned.

    As for the what-kind-of-vegetable question, at that presser I got my only question during the week I was with Harper and I asked him about his carbon policy.

  9. “As for why nobody talked about it, well, welcome to Canada. ”

    Hehe.

    “$990 billion defence policy ”

    What?!!!! Are you sure you didn’t add a zero there? That’s like 2/3rds of our GDP!

  10. He was gonna take a while to spend that much, Pete.

  11. Paul Wells:

    “As for the what-kind-of-vegetable question, at that presser I got my only question during the week I was with Harper and I asked him about his carbon policy.”

    Thank you for that. A question though–why only you? Where were the other reporters? (If you cover it in your latest Macleans piece, fine I’ll read it there when I get my copy.)

  12. “He was gonna take a while to spend that much, Pete.”

    Yeah, suppose so, but even considering spending over 25 years or something, that’s still huge. Our debt is what, 460 billion? Committing to 990 billion in defense spending is still massive.

    As for exposing our companies to foreign competition, maybe it’ll be the kick in the pants AECL needs. Or maybe they’ll crash and burn and our domestic nuclear industry dies.

  13. Are the rumours about stringent environmental conditions imposed by the Europeans in this trade deal true?

    That would explain Charest’s newly found affinity for all things green.

  14. Stephen Harper also has a $990 billion defence policy that got mentioned precisely zero times, except by me when I felt like complaining that it wasn’t being mentioned.

    Pfft, typical out of touch with mainstream Canadians media. Silly things like this, the war in Afghanistan and healthcare aren’t important to Canadians. We’d much rather talk about Puffin poop and sing all 3 trillion verses of the notaleader song. Now get the hell out there and find our Joe the plumber.

  15. “Are the rumours about stringent environmental conditions imposed by the Europeans in this trade deal true?”

    I can’t see it happening to any great degree, but that’s just a hunch. I’ve heard rumblings of having Canada sign up for the EU’s REACH (Registration, Evaluation, Authorisation and Restriction of Chemical substances)… but I can’t see it happening. You would be able to hear the screams by Canadian industry from Neptune.

    Full disclosure: I am a part-owner of a chemical product regulatory compliance firm.

  16. “Are the rumours about stringent environmental conditions imposed by the Europeans in this trade deal true?

    That would explain Charest’s newly found affinity for all things green.”

    Who knows? I’ve been mentioning it because it only makes sense. Why would the EU sign a free trade agreement with a country that allows free pollution. The Europeans were talking this week seriously about “carbon leakage” of industry to other countries, because they were discussing even more stringent GHG cuts to industry.

    And it wouldn’t be “newly found”, Quebec has always been smug about Kyoto because they produce public transportation, and get their power from hydro electricity.

  17. Now that I have looked into this a bit, I can understand why it was a non-issue during election. Today’s ceremony is about agreeing to have meetings to decide whether they should proceed with negotiating a trade deal.

    And the few most recent articles I have found all mention that there is significant resistance within EU to any trade deals with foreign countries. So they have agreed to have meeting on whether there should be more meetings.

  18. “I can’t see it happening to any great degree, but that’s just a hunch.”

    Mike Moffat, you are in denial, my friend. The surprise here would be if it WEREN’T included in the deal. I realize that for many in North America, climate change concerns are still considered pinko commie ideals but we are talking about the EU here.

    I think that those environmental conditions would explain why Charest turned himself into a Green Champion a couple of years ago.

    If those conditions do exist, Harper is going to have problems.

  19. “I don’t see why this is a big deal. I think between the geographical distance and high wages in both countries, there just isn’t much trade to be freed.

    And how come free trade never gets applied to agriculture?”

    Ok. Geographical distance. How much does China trade with the United States? Like $400 BILLION worth of goods? And they seem to be separated by an ocean, curious, no?

    As for what to trade? Have a little imagination, Canada has a diversified economy, we produce software, electronics, cars, airplanes, subway cars, ATVs, etc. We can sell our oil, lumber, and metals. That’s the meaning of free trade, it means everything can be freely sold to Europe and vice versa. People will find deals worth making.

  20. “Mike Moffat, you are in denial, my friend. The surprise here would be if it WEREN’T included in the deal.”

    Well, I guess it depends on what you mean by “stringent environmental conditions”. There’s a lot of things we could be talking about here, most of which have nothing to do with GHGs/Kyoto.

    I just can’t see Canada, particularly the Conservatives, sign a deal that would impose that much costs on chemical and chemical-related industries. Maybe I’m in denial, but if Canada *did* sign REACH, Canadian consulting figures like ours would make millions from it, so I don’t see any reason why I would be in denial.

  21. “I just can’t see Canada, particularly the Conservatives, sign a deal that would impose that much costs on chemical and chemical-related industries.”

    Mike, on that we agree. What I’m trying to verify is whether the EU are making GHG and Kyoto compliance a requirement in this deal. They have done so among themselves, right?

  22. This is toooootally off topic, but just came to my brain.

    Paul, are you going to do a post on how the major broadcasters faired on use of technology during election night?

    CBC online had the best interactive map and I think they did an OK broadcast. I didn’t think much of CTV and their online stuff was poor. That’s about all I caught. No John King breakthrough where I could zero in on county by poll station and such.

    Your thoughts?

  23. I expect all this will mean a renewed focus on TILMA, at least in the background. The current premiers’ conference and Our Leader’s upcoming one may churn those waters a bit.
    I believe only BC and Alberta are firmly on board at this point. Possibly Quebec as well. Sask has been opposed, even under the conservative Sask Party. Manitoba and Ontario, I’m not sure. The Maritimes, as usual, are keeping their heads down and sniffing the wind. They will do whatever Harper tells them. Danny, if he’s back on his medication, may be amenable if he can see a positive effect on Churchill 2.

    As a process already in play, the proponents of EU “free” trade may find it useful.

    The Left – whatever that is these days – oppose it because the business “community” (love that term) wants it. Small to medium size business (no, I’m not a “special interest”) pay it lip service but are suspicious.

    Then, again, Harper may try , if he senses all this going anywhere, may open up a whole new process.

    In any case, given his philosophical preference for letting the provinces go their own way, it could be interesting.

  24. EU trade should be popular with the anti-American crowd because it takes pressure off Canada’s reliance on trade with Europe, while free traders like me will like it because it is trade.

    Moreover, it is the kind of trade with the least negative impacts on the economy (as was the Canada US free trade agreement). What am I talking about? The traditional Smith/Ricardo argument for free trade is based on comparative advantage – different countries gain by trading with different specializations.

    However, (this is called the Leontieff paradox) most trade in the world is advanced world to advanced world – involving places with the same factor endowments (we are all capital rich). Why? Economies of scale in production are more possible when you are dealing with a larger market. The upside of that kind of advantage is that it does not change the product mix that we produce (free trade with a poor country would harm our labour-intensive industries, so jobs would have to transition to places where we are export-competitive). As a result, the short term job losses sometimes associated with free trade would be averted.

    Another random point – if you look at the rest of the world, they are going to get hurt more than us by the financial crisis. Where that has an impact for us is that we can’t export as much – which is horrible, because we have a trading economy. We need to open up new markets. I hope that such a deal will involve fair investment rules as well, so our companies can start buying up fire sale EU firms, pummelled by recession. Long live Canada inc.!

  25. The planet is concentrated on “free trade” and “international trade” as though there is never anything produced for sale within a given country for it’s own benefit and/or use.

    My idea is simply this: First we fix our own damned country, our own economy, and our own lives, and THEN let’s worry about trading with other nations once we’ve set the example by fixing our own systems here at home.

    The ONLY country on the planet that is doing that today is Iceland. Their main forms of energy are 100% natural, and 100% renewable. (Primarily home and water heating via geothermal vents, to about 70% of their natural energy consumption.) They have also recently banned derivitives trading, and have decided–most intelligently of all–to use their resources to fix their own country.

    It’s too bad that THEY had to be the first…and we’ll keep folling the US in the long-established absolute lock-step “monkey see, monkey do” manner that we have grown so accustomed to accept without question…even though we see our lives eroding because of it almost daily.

    WAKE UP, PEOPLE!!!

  26. “EU trade should be popular with the anti-American crowd because it takes pressure off Canada’s reliance on trade with Europe, while free traders like me will like it because it is trade.”

    I support it on both fronts. Well, I’m not actually anti-American, I just think it’s stupid to hitch our wagon so exclusively to the US economy. It’s long-term prospect look somewhat grim.

  27. I don’t know if Iceland is a country we want to emulate given its present circumstances (though I do agree that their district heating systems are great).

  28. I agree with Andrew. On both posts above. I take the point that perhaps fixing our problems at home would be a clever thing to do. But I understand our problem to be one of productivity levels. So even if we were to be the most productive country in the world, as a trading nation, we kind of need an export market to trade into. In fact, if we fix our problems at home (productivity) it would make our problems that much worse without trade agreements with more countries.

    On the reverse of that, of course, if we don’t have places to trade with, is productivity really a problem?

  29. “My idea is simply this: First we fix our own damned country, our own economy, and our own lives, and THEN let’s worry about trading with other nations once we’ve set the example by fixing our own systems here at home.”

    I believe this is called the “North Korean Plan”.

  30. O/T just to say the campaign special edition reads like butter. the trip to France anecdote is priceless.

  31. the comments about EU “free trade” are interesting, given that to compete with them we should have a distinct advantage … that is the average worker in Europe puts in about the same number of days on the job, on an annual basis, as the average member of Parliament.

  32. A free trade agreement with the EU is fine but we certainly do not need or want closer ties or political links to it…

  33. I sure do hope the next election features attack ads trying to link Harper to Sarkozy (Gordon Brown would be the more obvious comparison). Is Stephen Harper going to ditch Laureen for a supermodel like his hero, Sarkozy? We just don’t know. He won’t say.

    “My idea is simply this: First we fix our own damned country, our own economy, and our own lives, and THEN let’s worry about trading with other nations once we’ve set the example by fixing our own systems here at home.”

    Uhhh, the biggest problem with our economy is THAT OUR EXPORTS ARE GOING TO HELL BECAUSE OF THE DOWNTURN IN THE US. More trade elsewhere fixes that.

    “A free trade agreement with the EU is fine but we certainly do not need or want closer ties or political links to it…”

    If those political ties involve Sarkozy giving a middle finger to the separatists on a regular basis (like he just did), I am all for them. Sarkozy just became my favourite French President (take that VGE!).

  34. “The ONLY country on the planet that is doing that today is Iceland.”

    You mean the Iceland whose credit driven economy just collapsed entirely and is expecting at least a decade of economic pain before they simply get back to where they were?

    That’s your idea of a leading example of how to conduct business?

  35. Regardless of who we have free trade agreements with Canadian firms will still need to compete with those goods/services produced in parts of the world with much lower labour/regulatory input costs.

    The expansion of free trade agreements is inevitable, the salient issue to Canadian governments is whether we’ve taken the appropriate steps to maximize the benefits of FTA’s to the Canadian people by solving our troubling productivity crisis.

    Canadian ingenuity needs to be our greatest resource, not the stuff we were lucky enough to find in our backyards.

  36. W,

    It appears I misunderestimated you.

  37. “Canadian ingenuity needs to be our greatest resource, not the stuff we were lucky enough to find in our backyards.”

    I don’t know if that is quite true. Canada is too small to engage in high-tech competition in more than a few advanced industries (or in niches like commuter jets). Moreover, because of the high degree of foreign ownership, as well as our size, Canadian firms have and should continue to do well through technological transfer from the US, and research conducted overseas.

    Industries tend to cluster in particular areas, thanks to government help, and the proximity of institutions like universities. Silicon valley, for instance, is conveniently close to Stanford and Caltech. It is easy to say “we need to innovate more”. In practice, however, it may pay off to import technology, while focusing on making Canadian firms producers, rather than innovators.

    You are right that Canada’s productivity performance is dismal – we are only 11% more productive since the early 80’s (with most of that happening over the last ten years), compared to 25% for most of the OECD over the same period. It is a particular kind of innovation, however (process innovations rather than product innovations) that are likely to catapult Canadians to greater productivity and prosperity. Reducing the costs of doing business by removing barriers to trade are one way of getting the same effect of improved productivity, at least vis-a-vis the EU.

  38. Foreign-owned subsidiaries do not “innovate”.

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