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We have a deal with Europe. Let’s not blow it

We have a deal with Europe. Let’s not blow it

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Published by: EU-Canada Partnership on Nov 08, 2013
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05/15/2014

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LAWRENCE HERMAN
 We have a deal with Europe. Let’s not blow it
Lawrence Herman
Contributed to The Globe and MailPublished Friday, Oct. 18 2013, 11:43 AM EDTLast 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 wasn’tgoing anywhere. But persistence and goodwill seems to have paid off.The onl problem is, we don’t have the text yet. All we have is the outline of an agreement inprinciple. A lot of what’s being put out by the Prime Minister’s Office has to be accepted on faith.
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Judging from the rosy press conference given by Prime Minister Stephen Harper and EU PresidentJose Barroso earlier Friday, however, the hard negotiations are over and it’s now just a matter of scrubbing the legal text.Even without the final text, we’ve known for months that this will be a vast agreement.Bey ond the usual market opening aspects, including elimination of most tariffs – itself a matter oconsiderable importance – it will cover many areas not included in the North American free-tradeagreement – like provincial procurement, mutual standards recognition, competition policy,agricultural access and increased patent protection.Incidentally, the NAFTA is now 20 years old and Canada hasn’t signed a major trade deal since. So theCETA not only breaks new ground: it breaks a log-jam in Canadian trade efforts and has huge politicalsignificance for the Harper government.Let’s also not underestimate CETA’s 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 canexpect 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 Canada’s heavily protected dairy sector.Canada and the EU trade almost $100-billion annually in goods, not counting many additional billionsin services. Letting in few thousand tonnes of European cheese, frankly, is of no importance in theoverall scheme of things. As to ideological opponents, they miss the point. For decades, Canadian governments have beentrying to diversify our trade away from our over-dependence on the United States, reliance on asingle 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 withoutan agreement don’t have. That’s 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 doesn’t 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 CETA’s final provisions emerge. There will be close examination of each line of the hundreds of treaty pages. In this exercise, it will be importantto 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 can’t increase trade or add jobs.In getting the CETA done and fully implemented, the government will have accomplished the firsttask. If the private sector doesn’t rise to the occasion and take advantage of the deal, there will belittle reward for these efforts.
 Lawrence L. Herman, Cassels Brock & Blackwell LLP, and Senior Fellow, C.D. Howe Institute,Toronto.
 
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