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Free trade with Europe? Never mind

The auto industry has decided Canada will be more competitive if it trades less and subsidizes more


 

How’s the big trade deal with Europe coming along? Don’t ask.

Study: Canada-EU Trade deal proposals could add $2.8 billion to drug costs

Environmentalists say Canada-EU Trade Pact bad for Climate Change

Ont., Que. concerns holding up EU trade talks, roundtable says

EU nations reluctant to liberalize trade in services

Estimated $12 billion windfall in EU deal dismissed as ‘sales pitch’

Charest defends setting conditions in EU talks

To be sure, much of this choppy weather is coming from the leftish labour-union and economic-nationalist types who announced 10 months ago they were mobilizing to stop the Canada-EU deal. They have been as good as their word. But what’s more striking is that, three months after the negotiations were originally scheduled to be completed, the trade talks drag on — and Canada-EU trade liberalization has no prominent champion.

Despite his protestations, Jean Charest has run out of enthusiasm for the Canada-EU trade process he launched more or less by himself in 2007. (It is amazing to me that I wrote my first article about all of this nearly four years ago.) And at any rate, Quebec has run out of enthusiasm for him. Dalton McGuinty was never a strong advocate of this deal. Gary Doer, who used to be, is in Washington where he cannot help. Alberta, B.C. and Newfoundland are distracted with leadership politics. The Canadian Council of Chief Executives, run by one of Canada’s most ardent free traders, John Manley, has buried any advocacy for Canada-EU trade so deep in its website you can’t find it with teams of hounds. For good reason, as we will soon see.

I haven’t paid all of this the close attention I did in 2008 and 2009, so I was amazed when I visited recently with an ambassador from an EU country. He said Canada and the EU have pencilled in July as the signing date for the so-called CETA, or Comprehensive Economic and Trade Agreement, during the annual Canada-EU summit in Ottawa. But then this ambassador said he sees no sign there will be such a deal. “The premiers never have anything good to say about it,” he said. (Here’s an omen. Watch what happens when you try to follow the link to a federal government website about the deal.)

Normally I’d predict that when that moment comes, or a few months later, Harper and his counterpart (Poland’s prime minister, I believe) will sign a tremendously watered-down trade agreement that keeps all the usual sacred cows — supply management, procurement, appelations controlées, services — well-watered and un-liberalized. Except for this: the lead European negotiator, Mauro Petriccione, has already said publicly that Europe is not interested in such a limited deal because it would harm the credibility of future trade negotiations with other non-European countries and blocs. So there’s a real possibility the whole four-year process could simply collapse.

And all of that was before tonight’s news. Which is big.

A high-powered group of auto executives is pushing Ottawa to halt free-trade talks with South Korea and the European Union and to offer incentives for an industry threatened by the rising dollar and growing competition from lower-cost markets.

The story goes on to detail the handiwork of the surreally-named “competitiveness working group” of the Canadian auto-industry subsidy racket. It turns out that the heads of Magna and the Big Five automakers have decided to argue, with a straight face, that Canada will be more competitive if it trades less and subsidizes its heavy industry more. “The dollar’s back at parity and that creates an issue from a cost standpoint,” Ford’s president says. “To retool our plants in Canada, we need incentives.” Apparently threat of bankruptcy isn’t incentive enough. As for CETA, “Canada requires a more sophisticated and less-idealistic view of free trade with Korea and the European Union.”

Now, if anyone’s tempted to predict that the car bums will be shown the door when they call on this government — this Conservative, red-blooded, fearlessly entrepreneurial government — to eviscerate Canadian trade policy and pony up yet more subsidies, probably all I need to say to destroy that fantasy is that the minister they’ll be meeting with is Tony Clement.

That’s the end of that trade deal.


 

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