Canadian Manufacturing

Canada-Europe trade deal: let’s not praise CETA until we know what it’s made of

After Canada’s most comprehensive trade deal was announced, the only thing that’s left is everything



It’s been less than a week since the federal government announced the signing of a long-awaited trade deal with the European Union, and the praise has been rolling in like duty-free cars across the Atlantic.

On the automotive side, the Canadian divisions of Ford and General Motors were quick to jump on the congratulatory band wagon—and with good reason.

The new Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU will allow Canadian automakers to ship as many as 100,000 duty-free vehicles under relaxed rules-of-origin requirements, up from the current 8,000 allowable.

Joining Ford and GM in lauding the deal were a host of industry, trade and professional associations, all expressing jubilation over the deal that could still be years away.

The expanded access to Europe’s market of 500 million was enough for Canadian Manufacturers and Exporters (CME) president and CEO Jayson Myers to proclaim the agreement “the Wayne Gretzky of trade deals.”

However, with details slowly starting to trickle out of the Prime Minister’s Office as to what the yet-to-be-written deal will cover, one glaring question remains: What’s with all the glad-handing when we don’t even know what the deal involves?

Sure, it all sounds good—access to the world’s largest consumer market; the mass elimination of tariffs on Canadian-made goods; bottom-line growth in the nation’s GDP; and the creation of a government-estimated 8,000 jobs.

But where are the cold, hard facts of what makes up the agreement?

Where are the details of what exactly is wrapped up under the guise and allure of CETA?

Bilateral agreements are great when they benefit Canada and Canadian firms working in export markets, but I’m certainly not ready to heap praise on a trade deal that has been five years in the making—and one that will stay under wraps for at least the next few months—until I know exactly what I’m lauding.

Indeed, a story by Julian Beltrame of The Canadian Press points out that for all the talk around the positives the deal will purportedly deliver, “much of what Canada stands to gain could be put in baskets best labelled ‘potential’ or even ‘wishes’.”

It’s what Canadian businesses can make of it, Beltrame notes—no gimmies, but plenty of “opportunity” for those willing to take the risk.

That’s not to mention that, despite all the pro-Canada hype, this deal is a two-way street.

The other side to this deal—the European economic zone—is the same side that has been stuck in an historic economic slump until recent months and will be chomping at the bit to sell outside its tough domestic market on the road to recovery.

Touted as a win for Canada by federal officials, let’s not forget that their counterparts across the pond did their due diligence in negotiating an agreement that is beneficial to Europeans, too.

Some observers are even saying that at this juncture the deal looks more beneficial to Europe than Canada.

And the biggest win for Europeans: The opening of public procurement contracts to EU firms.

Billions of dollars in work destined for Canadian companies will no longer be a guarantee when the trade pact kicks in, meaning more competition to those same Canuck firms working hard on developing those aforementioned opportunities waiting for them in Europe.

The Canada-EU trade deal may be bigger than NAFTA in size and scope.

It may be the most comprehensive trade agreement ever negotiated for Canada.

But I’ll reserve my congratulations until I know exactly what it is I’m applauding.

—Dan Ilika is the Assistant Editor with CanadianManufacturing.com

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