The European Union and Canada have been discussing a trade deal that could be worth up to 26.5 billion Euros (US$38.2 billion) a year. Canadian and EU leaders will officially launch negotiations at their Montreal summit on Oct. 17, three days after Canadian federal election.
The Canadian Globe and Mail reports:
Trade Minister Michael Fortier and his staff have been engaged for the past two months with EU Trade Commissioner Peter Mandelson and the representatives of European governments in an effort to begin what a senior EU official involved in the talks described in an interview yesterday as “deep economic integration negotiations.”
The new deal will be wider in scope than the North American Free Trade Agreement (NAFTA) between Canada, The USA and Mexico. It will cover free trade in goods, services and skilled labor. It will also create an open market in government services and procurement.
Previous attempts at a deal between Canada and the EU have failed. However, there is greater political will for a deal since the breakdown of the Doha round of the World Trade Organization talks in July.
Some Canadians see this new deal as a way of balancing NAFTA. They consider Canada has become too dependant on one market. In the current US presidential campaign, candidates, including Barack Obama, have promised to renegotiate NAFTA.
Skilled Canadians might be attracted to the idea of being able to travel and work freely in any of the 27 EU member states.
But unless Canada also liberalizes inter-province trade, there will be a strange situation where it will be easier for an EU based company to trade anywhere in Canada, than for a Canadian one.
There is concern among provincial governments that EU services companies will out-compete previously protected Canadian ones for government contracts. Even though, the ultimate beneficiaries of such competition are Canadian consumers of those services.
If the deal goes through, Canada will be the first non-European state to have such extensive a trade deal with the EU. It will then have a similar problem to countries such as Norway and Switzerland. These find themselves directly affected by decisions made by EU institutions, without a seat at the table when those decisions are being made.
No different from NAFTA some may say.
Do you think Canada and the EU should enter into such a comprehensive trade deal?
Popularity: 2%
durano lawayan
Hi Tim,
There are disadvantages for Canada in that they are not part of the decisions that the EU will make as you said, but the advantages of trading and deploying their skilled people anywhere in the EU is a far better deal than just having the NAFTA – even if the limitations are the same. Canada’s protected services and industries will just have to open up and be more competitive, and they have the skilled labor to do this. Inter-trade between their different regions must be improved, perhaps even consolidated, in order to compete more effectively – for the benefit of all Canadian citizens. The country has been too far north in its existence, and it’s about time it shows its mettle in the global stage.
–Durano, done!
September 21, 2008 at 12:53
Tim Neale
I agree, the benefits for Canada far out weigh the disadvantages, but often those losing out in trade deals have a more compelling argument than those gaining.
“I will lose my job now!” tops
“Everyone will likely be paying slightly less for their sevices, and the capital freed up up will create new demand and so new jobs later.”
September 22, 2008 at 10:53
Brad Hart @ A DoFollow Blog
Those Canadians who think Canada has become too dependent on the US they are right, and right to be looking abroad for other opportunities, because we in the US have screwed ourselves for the moment. That being said the Canadian government needs to be careful about stepping on too many toes. We have career politicians who hold grudges like sea water holds salt. It could get ugly in a decade or three if they irritate the wrong people.
September 27, 2008 at 14:34
Tim Neale
Some Canadians see positioning Canada as a bridge between the US and the EU will give Canada lots of economic and diplomatic opportunities.
September 27, 2008 at 20:45
RE Ausetkmt
Brilliant Indeed; I think the Amereo is the next bridge to saddle us with each others debt and problems.
can you see anyway we can stop this nonsense short of refusing to spend our own currency and a run on the banks ?
btw, I reposted and pointed to this blog today,
in my blog; because I really think you understand.
keep it logical my friend to the north,
~RE
September 29, 2008 at 05:32
Tim Neale
There is so much confusion in the US and world markets at the moment, it is hard to make any serious suggestions on what to do next.
See what happens when the smoke has cleared a bit.
September 30, 2008 at 22:44