LAWRENCE HERMAN

We have a deal with Europe. Lets not blow it

Lawrence Herman Contributed to The Globe and Mail Published Friday, Oct. 18 2013, 11:43 AM EDT Last updated Friday, Oct. 18 2013, 5:15 PM EDT

We finally have a deal with Europe, called a comprehensive economic and trade agreement (CETA). It took longer than expected and there was a real sense of drift, many thinking that the effort wasnt going anywhere. But persistence and goodwill seems to have paid off. The only problem is, we dont have the text yet. All we have is the outline of an agreement in principle. A lot of whats being put out by the Prime Ministers Office has to be accepted on faith.

More Related to this Story Explainer: Why the Canada-EU trade deal will affect almost every industry Canada, EU unveil historic' free-trade agreement Canadas auto industry faces sweeping change with EU trade deal
Judging from the rosy press conference given by Prime Minister Stephen Harper and EU President Jose Barroso earlier Friday, however, the hard negotiations are over and its now just a matter of scrubbing the legal text. Even without the final text, weve known for months that this will be a vast agreement. Beyond the usual market opening aspects, including elimination of most tariffs itself a matter of considerable importance it will cover many areas not included in the North American free-trade agreement like provincial procurement, mutual standards recognition, competition policy, agricultural access and increased patent protection. Incidentally, the NAFTA is now 20 years old and Canada hasnt signed a major trade deal since. So the CETA not only breaks new ground: it breaks a log-jam in Canadian trade efforts and has huge political significance for the Harper government. Lets also not underestimate CETAs symbolic importance for Europe, where the economic news has been dismal the last few years. A trade deal with Canada is a good story for them. By providing a

template, will actually help the EU in its trade negotiations with the Americans. As we go through the internal approval processes here, including Parliamentary debate, we can expect the usual rear-guard actions by opponents of free trade, including the Canadian dairy lobby. The dairy farmers have already started wailing, saying they are angered because a relatively small volume of European cheese will be allowed into Canadas heavily protected dairy sector. Canada and the EU trade almost $100-billion annually in goods, not counting many additional billions in services. Letting in few thousand tonnes of European cheese, frankly, is of no importance in the overall scheme of things. As to ideological opponents, they miss the point. For decades, Canadian governments have been trying to diversify our trade away from our over-dependence on the United States, reliance on a single customer being a poor business strategy. Canada needs a variety of strong trading partners. The CETA will provide that, with access to a wealthy and stable market of over 400 million people. But its access on a preferential basis is the key. It means that Canadian companies will have trading privileges that suppliers from countries without an agreement dont have. Thats of value to Canadian automotive, aerospace, industrial equipment, transportation companies, not to mention agri-food exporters. When we talk about $60-billion in Canadian exports to the EU, that doesnt include the billions we do and where there will be real gains in exporting services, such as construction, architecture, engineering, consulting, computer software. The immediate challenge lies in the months ahead, as the CETAs final provisions emerge. There will be close examination of each line of the hundreds of treaty pages. In this exercise, it will be important to keep perspective. Trade agreements are more than sum of their parts. At the end of the day, however, the CETA is only an inter-governmental framework for the conduct of business. By itself it cant increase trade or add jobs. In getting the CETA done and fully implemented, the government will have accomplished the first task. If the private sector doesnt rise to the occasion and take advantage of the deal, there will be little reward for these efforts. Lawrence L. Herman, Cassels Brock & Blackwell LLP, and Senior Fellow, C.D. Howe Institute, Toronto.

More Related to this Story

Ontario, Quebec seek aid for dairy sector as provinces back EU trade deal Protecting Canadas dairy industry leaves sour taste Topics: Europe Stephen Harper European Union Canada