Canada-EU trade pact still not a done deal

Canadian Prime Minister Justin Trudeau (L) talks with EU Council President Donald Tusk during the signing ceremony of the Comprehensive Economic and Trade Agreement (CETA), at the European Council in Brussels, on October 30, 2016. The EU and Canada finally signed a landmark free trade deal seven years in the making on October 30, 2016, after overcoming last-minute resistance from a small Belgian region that nearly torpedoed the entire agreement. CETA removes 99 percent of customs duties between the two sides, linking the single EU market of 28 nations with the world's 10th largest economy. / AFP / POOL / FRANCOIS LENOIR (Photo credit should read FRANCOIS LENOIR/AFP/Getty Images)



The Canada-European Union Comprehensive Economic and Trade Agreement, barely rescued from the grave, may yet prove to be one of the walking-dead. The signature of Prime Minister Justin Trudeau and those of his European counterparts on the document are, at this point, merely ceremonial. Before implementation, ratification votes must be held in Ottawa and in 28 parliaments across the old continent.

The regional assembly in Wallonia allowed the Belgian PM to sign on because the legality of the Investor State Dispute Settlement mechanism, which permits firms to sue governments over regulations that allegedly affect profits, will first be tested in court.

Canada’s trade minister, Chrystia Freeland, frustrated with the Belgian regional parliament that had been blocking the deal, was on the verge of tears as she said, “Canada is disappointed. I am personally very disappointed. I have worked very, very hard. We have decided to go home. I am truly very, very sad,” the Guardian reported. The head of the European Parliament, however, held emergency talks in a bid to save the deal.

In sharp contrast to Chrystia Freeland, socialists in Canada join millions of people who celebrated the temporary setback to CETA.  We restate our commitment to oppose CETA and similar undemocratic, pro-big business, anti-labour so-called free trade agreements.

Initiated in the Stephen Harper years, and endorsed by Justin Trudeau’s Liberal government, CETA has been seven years in the making. It stumbled when the legislative assembly of Wallonia, a French-speaking region with a population of 3.5 million, blocked the government in Brussels from signing the deal. Wallonia’s vocal and powerful farmers have been central to the region’s objections to the investment protection provisions of the treaty. The deal cannot be ratified without European Union unanimity.

There is deep, widespread opposition to CETA, including by European labour unions, environmentalists and human rights groups. On September 17, 320,000 people marched against CETA and TTIP in Germany. The governments of Romania and Bulgaria have said that they will vote against CETA if Canada doesn’t change its visa requirements. Citizens in Germany, Netherlands, Poland, Slovenia, and Austria have also expressed grave concerns. In Canada, many social justice organizations, such as the Council of Canadians, have been organizing campaigns against CETA. In June, dairy farmers from Ontario and Quebec drove to Parliament Hill with their tractors to raise concerns about lost income and the slow erosion of supply management, under the proposed deal.

CETA is much more than a trade agreement. It is an arrangement to introduce a variety of capital-friendly changes in areas as diverse as intellectual property rights, government procurement, food safety and environmental protection, financial regulation, the temporary movement of workers, and public services. It stipulates strong and fully enforceable protections for investors against sovereign governments and their citizens.

CETA would have grave consequences for the Canadian economy and workers. In the first academic study on CETA, economists Pierre Kohler and Servaas Storm show that Canada would lose 23,000 jobs between now and 2023. Using the credible methodology of the United Nations Global Policy Model, this study depicts the flows of non-scientific reports commissioned by the EU and the Canadian government.  It shows that: (1) tax income will decrease by 0.12 per cent of GDP, as countries would reduce corporate taxes to compete for investment. (2) Workers will lose $2,656 per person over seven years. (3) Canada’s GDP would fall 0.12 per cent. Economist Jim Stanford finds that the trade deal would make Canada’s current trade imbalance with the EU incrementally worse. According to Stanford, “the growing bilateral deficit and resulting decline in net demand for Canadian-made automotive products arising from this widening bilateral deficit will negatively affect Canadian production, investment, and employment opportunities.” And, under CETA, drug costs to Canadians are estimated to increase by between $850 million and $1.6 billion annually.

CETA is very undemocratic. Public consultation about the deal was very limited and the text of the agreement was released late, which severely limited public debate. The deal is also undemocratic due to its pro-corporate regulations about government procurement policies. Currently, Canada’s existing commitments covering provincial and local government purchasing under international trade treaties are quite limited. But CETA promises corporations, in the words of Canadian Centre of Policy Alternatives’ Scott Sinclair, “unconditional access to government procurement, particularly at the sub-national level… The proposed restrictions on government purchasing would eliminate the flexibility for governments to use their purchasing power to enhance local benefits, even when contracts are competed openly and do not discriminate on the basis of the nationality of the suppliers.”

A corporate power grab, CETA can be defeated. Defeating CETA should be followed by sending other pro-corporate “free” trade agreements such as Trans-Pacific Partnership (TPP), the Foreign Investment Promotion and Protection Agreement (FIPA) with China, and North American Free Trade Agreement (NAFTA) into the trash bin of history.  Unions, and the NDP (which has been rather quiet on CETA) should take the lead in this effort.

Photo: Canadian Prime Minister Justin Trudeau (L) talks with EU Council President Donald Tusk during the signing ceremony of the Comprehensive Economic and Trade Agreement (CETA), at the European Council in Brussels, on October 30, 2016. FRANCOIS LENOIR/AFP/Getty Images

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