Blog, International Trade and Investment, The Economy, What's New

End The Foot Dragging and Sign The Trade Deal with Europe

View online at the Globe and Mail here: http://www.theglobeandmail.com/globe-debate/end-the-foot-dragging-and-sign-the-trade-deal-with-europe/article20757135/

CETA – Partnership for Resource Trade

September, 2014

Thankfully, international trade is an area where, at least in more recent times, political partisanship takes a back seat. (Mostly.)

There will always be naysayers, but the overwhelming evidence points to trade being better, economically and socially, for both exporters and importers. In almost every case (acknowledging certain continuing challenges with developing countries), the tide of rising prosperity from international commerce, done responsibly, lifts all boats.

For Canada, a major trading nation which, in relative terms, depends far more on trade than many others, the more access we have to other markets the better. Although global multilateral trade negotiations have faltered, bilateral and regional arrangements that reduce tariffs and other barriers have been increasing, simply because it makes economic sense to do so. The recent agreement on the final text of the Canada-EU Comprehensive Economic and Trade Agreement (CETA) is very welcome news – for both Canada and Europe.

Canada is a resource-rich country. We produce high quality food, fish, wood products, minerals, energy — and an extraordinary variety of related products and services – that the rest of the world wants. Our various resource sectors provide high-value-added jobs in diverse areas such as agri-science, technical innovation, research and development, engineering and design. Canadians continue to create and build more efficient and more environmentally sustainable growing, extracting, processing and manufacturing methods, which in turn make our products and services more attractive to the world.

Canadians in all of these sectors – the business people, the workers, the growers, as well as the millions of Canadian consumers who will benefit from more access to better-priced European goods – all welcome CETA and look forward to its implementation.

CETA will open the massive European market to more Canadian goods and services. With 500 million people and $17 trillion GDP, the European Union is the world’s largest integrated economy area, and Canada’s second-largest trading partner. CETA also represents a new generation of treaties, and makes the most of increasing globalization. As its name suggests, it is ambitiously comprehensive in addressing far more than just goods, but services as well, and not just tariffs, but investment and government procurement. CETA means opportunities for Canadian exporters, service providers, importers and consumers, and is forecast to deliver a 20% boost in bilateral trade, the equivalent of creating almost 80,000 jobs. These new trade opportunities will encourage greater diversification of our economy and give stronger incentives to the development of our businesses, products and services.

It also moves both Canada and the countries of the European Union to enhance the human and social dimensions of our relationship, particularly in regard to the environment, research, innovation and culture.

In a world of increasingly interdependent economies, CETA positions Canada well. Strategically, the fact that the Europeans chose to proceed with Canada as a prelude to the US/EU negotiations speaks to how Canada can position itself as a bridge in the important transatlantic relationship between our two continents. And adding CETA to NAFTA – the biggest and richest consumer market in the world with Europe together with the 450 million people of the NAFTA area – puts Canada right in the middle of the biggest trade zone in the world.

The rising economic and political power of emerging and increasingly aggressive economies also creates a much bigger geopolitical challenge. And here, the stakes are very high. What is at play? Particularly with the absence of comprehensive multilateral progress, which countries, or regional blocks, will set the rules of trade? Canada, the EU and the US together comprise 45% of the world’s GDP and a third of its trade. Finalizing CETA is a major step in substantially strengthening our hand in protecting our vital economic interests.

Canada cannot wait on the sidelines, but must be a full participant, and CETA is an excellent step forward.

The CETA trade deal is overwhelmingly a good thing for Canada and Canadians, and we encourage those now tasked with finalizing the details and getting it ratified to do so as quickly as possible.

Martha Hall Findlay, an MP from 2008 to 2011, is an executive fellow at the School of Public Policy at the University of Calgary and chairs the Advisory Council of the Partnership for Resource Trade.

 Jean Charest, Partner at McCarthy Tétrault and former Premier of Québec, chairs the Partnership’s Steering Committee.

 

View online at Le Devoir here: http://www.ledevoir.com/economie/actualites-economiques/419236/l-aecg-entre-l-union-europeenne-et-le-canada-un-traite-a-conclure-et-a-adopter-au-plus-vite

 

AECG – Partenariat pour le commerce des ressources

Septembre 2014

Heureusement, le commerce international est un domaine où, ces derniers temps du moins, la majorité des activités politiques partisanes ont été reléguées au second plan.

Il y aura toujours des récalcitrants, mais une preuve abondante démontre que le commerce est meilleur, sur les plans économique et social, pour les exportateurs et les importateurs. Dans presque tous les cas (compte tenu de certains défis permanents que posent les pays en développement), la marée montante de la prospérité issue du commerce international, si celui-ci est fait de manière responsable, soulève tous les bateaux.

Plus le Canada, nation commerçante d’envergure qui, en termes relatifs, dépend davantage du commerce que bon nombre d’autres pays, a accès à des marchés variés, mieux c’est. Bien que des négociations commerciales multilatérales mondiales aient achoppé, force est de constater que les accords régionaux et bilatéraux ayant pour objet la réduction de tarifs et la suppression d’autres barrières sont à la hausse parce qu’ils sont tout simplement réalistes sur le plan économique. L’entente récente sur le libellé définitif de l’Accord économique et commercial global entre le Canada et l’Union européenne (l’« AECG ») est une excellente nouvelle, tant pour le Canada que l’Europe.

Le Canada est un pays riche en ressources. Nous produisons des aliments, du poisson, des produits du bois, des minéraux et de l’énergie de première qualité de même qu’une vaste gamme de produits et services connexes que veut le reste du monde. Nos divers secteurs des ressources fournissent des emplois de grande qualité dans divers domaines, notamment dans les secteurs agro-scientifique, de l’innovation technique, de la recherche et du développement, du génie et de la conception. Les Canadiens continuent d’inventer et d’élaborer des méthodes de culture, d’extraction, de traitement et de fabrication plus efficaces et durables sur le plan environnemental, de sorte que nos produits et services sont particulièrement attrayants sur le marché mondial.

Les Canadiens de tous ces secteurs, qu’il s’agisse de gens d’affaires, de travailleurs, de producteurs ou des millions de consommateurs canadiens qui bénéficieront d’un accès accru à des biens européens à meilleur prix, se réjouissent de l’AECG et de sa mise en œuvre prochaine.

L’AECG permettra à un nombre croissant de biens et de services canadiens de percer l’immense marché européen. L’Union européenne, dotée d’une population de 500 millions d’habitants et d’un produit intérieur brut (« PIB ») de 17 billions de dollars, est la plus grande économie intégrée du monde ainsi que le deuxième partenaire commercial en importance du Canada. Qui plus est, l’AECG fait partie d’une nouvelle génération de traités qui tirent parti de la mondialisation croissante. Comme son nom l’indique, cet accord de très grande envergure vise plus que des biens et des tarifs. En effet, il s’applique aussi à des services, des placements et des marchés publics. L’AECG est synonyme de possibilités d’affaires pour les exportateurs, les fournisseurs de services, les importateurs et les consommateurs canadiens et devrait entraîner une augmentation de 20 % du commerce bilatéral, ce qui correspond à la création de quelque 80 000 emplois. Ces nouvelles occasions d’affaires donneront lieu à une plus grande diversification de notre économie de même qu’à de meilleurs incitatifs en vue du développement de nos entreprises, produits et services.

En outre, l’accord incite le Canada et les pays membres de l’Union européenne à mettre en valeur les dimensions humaines et sociales de notre relation, particulièrement à la lumière de l’environnement, de la recherche, de l’innovation et de la culture.

Dans un monde où les économies sont de plus en plus interdépendantes, l’AECG permet au Canada de renforcer sa position. D’un point de vue stratégique, le fait que l’Union européenne ait choisi de collaborer avec le Canada avant d’entamer ses négociations avec les États-Unis montre comment notre pays peut se positionner pour faire le pont dans la relation transatlantique cruciale entre les deux continents. Le Canada se trouve au milieu de la plus importante zone commerciale du monde grâce à l’AECG et à l’ALENA, accords qui visent respectivement le marché de consommation le plus grand et le plus riche de la planète ainsi que les 450 millions d’habitants nord-américains.

Le pouvoir économique et politique grandissant d’économies émergentes de plus en plus dynamiques pose aussi un défi géopolitique d’un tout autre ordre où les enjeux sont fort élevés. Que sont ces enjeux? Plus particulièrement, en l’absence de progrès multilatéraux substantiels, quels pays, ou blocs régionaux, établiront les règles commerciales? Ensemble, le Canada, l’UE et les É.-U. représentent 45 % du PIB et le tiers du commerce à l’échelle planétaire. L’achèvement de l’AECG constitue une étape majeure nous permettant de renforcer considérablement notre position pour protéger nos intérêts économiques vitaux.

Le Canada ne peut se permettre d’attendre dans les coulisses. Il se doit de participer pleinement et l’AECG lui donne l’occasion rêvée de le faire.

L’AECG représente une occasion en or pour le Canada et les Canadiens, et nous encourageons les personnes qui sont maintenant chargées d’arrêter définitivement l’accord et de le faire ratifier d’agir ainsi dans les meilleurs délais.

Martha Hall Findlay, députée entre 2008 et 2011 et membre exécutif de l’École de politique publique de lUniversité de Calgary, préside le Conseil consultatif du Partenariat pour le commerce des ressources.

 Jean Charest, associé chez McCarthy Tétrault et ancien premier ministre du Québec, préside le Comité directeur du Partenariat pour le commerce des ressources.

 

 

Supply Management, The Economy, Viewpoints, What's New

Free trade with Europe’s a start, but we’re still overpaying for food

Read it at the Globe and Mail or below.

The ‘last stumbling block’, the ‘most contentious issue’, the ‘hardest to agree to’ part of the now finally-signed comprehensive trade agreement with Europe (CETA) turns out to have been not cars, not sub-national procurement, not drugs, not beef, not manufactured goods, all of which were important and contentious issues for sure. No, the last holdout was cheese, with Canada finally agreeing to allow a modest 17,000 more tonnes of cheese into Canada.  Cheese lovers hold on to your cheers – that’s barely 3.5% of Canadians’ total cheese consumption.

Right now the quota is only 20,000 tonnes (as is, only about 4% of the Canadian market), and the additional 17,000 are all being offered to the EU.  But the total amount of cheese allowed in under quota (without tariffs) will still be only a tiny fraction of the cheese available to Canadians – we have to buy the rest through the supply-managed, artificially high-priced Canadian dairy cartel. (Any imports over the quota face tariffs of about 250%, effectively keeping them out.)

To put a total quota of 37,000 tonnes of cheese into perspective: In 2009 there were 35,500 tonnes of skim milk powder sitting in storage, unused. That’s equivalent to more than 34 million litres, or more than one litre per Canadian. Thanks to supply management’s economic distortions, there is a chronic surplus of skim milk powder in Canada each year, which the Dairy Commission buys (with money earned through high milk prices), simply to protect the system.

The dairy lobby has wasted no time responding to the EU trade deal announcement – they claim that “dairy farmers will not support the Harper government agreeing to a deal with the EU that gives away the Canadian cheese market that Canadian dairy farmers and cheese makers have worked so hard to develop over the years.” “Gives away”? The Europeans are simply being allowed to bring in a tiny fraction more of the cheese that Canadians want to consume, at market prices.

The irony is that there are some wonderful cheeses that are now being made in Canada by innovative, entrepreneurial dairy farmers and small processors – indeed, Glengarry Cheesemaking’s Lankaaster cheese just took top prize at the annual Global Cheese Awards. But their ability to turn good cheese into economic success is severely hindered by the artificially high prices they pay for milk, and by our system preventing them access to other markets. I’m sure that many of our small cheese manufacturers – those the dairy lobby is so quick to “defend” — would do very well exporting, but at market prices and to the much larger markets that we might have access to, if it weren’t for our own protectionist policies. This was a tough enough hurdle for the EU trade deal — the Trans Pacific Partnership negotiations, offering tempting access to huge Asian markets, will likely be off-limits if we don’t fully dismantle supply management.

This concession on cheese was part of the effort to get the EU to allow more Canadian beef into their market. The Europeans clearly have their own protectionist forces at work, and, in a world where our supply management system forces Canada to make major trade-offs, this is one of the rare examples where supply management is held up as a tit for a tat. But even putting aside freer trade and greater access to markets for Canadian food, goods and services — Canadians should be up in arms over the high prices we continue to pay for dairy, poultry and eggs here at home: Over $200 MORE for the average family each year. And of course the people who suffer the most from these high prices include single parent families, too often living in poverty, with children who most need basic, healthy food.

How Thomas Mulcair and the NDP can continue to support a regressive system that hurts so many Canadians most in need is astounding.

Canadians are upset about their cell phone charges – they should also be insisting that their politicians take action to achieve market prices for basics such as milk, cheese and chicken. The Harper government is happy to be seen as pro-consumer for the one, but continues to show utter hypocrisy on the other.

Message to the Harper government and all politicians: too many of you are afraid of the dairy lobby.  Indeed, it used to be very powerful, but dairy farms are now far outnumbered – in every single federal riding – by the 94% of Canadian farms that are NOT supply managed. The vast majority of those other farmers want to see supply management go — including the beef, pork, grain, oilseed and pulse producers who could then gain access to other major world markets. In the 1970s, when supply management was brought in, there were about 145,000 dairy farms across the country. But that number has dropped a staggering 91% to barely more than 12,500 — nationwide.  They now represent far fewer votes than do all of the people, including the majority of Canadian farmers, who would benefit from dismantling the system. There are no more excuses. There have been proposals to dismantle the system in a positive, successful way for the farmers, and successful examples. It can be done, win-win.

For a full description of the supply management system, the challenges it causes, and, most importantly, positive recommendations for an exit strategy that is win-win – including for dairy farmers – see this report from the School of Public Policy,

The negatives now far outweigh the positives — Canadians need to start insisting that their politicians to get something done.  17,000 tonnes is a small drop in what should be a big bucket.