Three open ended issues that need to be considered when we talk about CETA:
1) Under the arrangement Canada could become a gateway for other NAFTA members – namely the US and Mexico to export their raw goods to Canada and have them them exported onward in final manufactured form to the EU. In this way CETA could bring indirect benefits to the US (and Mexico) and may explain in part why the US is in no hurry to rush into an agreement with the EU and assuming that these companies have a manufacturing base located in Canada – then all the better for Canada. But where this might cause problems for Canada is when other countries start to sign free trade deals with the EU – if the US does and Mexico may eventually as well then Canada’s gateway opportunity will be diminished and our manufacturing base would shrink even further as it relocates to more efficient economies.
2) A big push for a lot of urban centres in Canada is to develop ways for consumers to support the local food economy (eg glocal). The food sector is the single largest employer in the GTA for example. All that could change under CETA because some aspects of that supply chain such as retail would be open to competition from the EU. Complicating matters is that CETA has specific procurement rules that apply to both municipalities and provinces because the EU wants access to those markets and they want to bid on municipal projects too which have historically been the way cities keep their local economies growing by keeping the money circulating locally. All this is good you say – competition breeds efficiencies and so on but its not clear Canada will get the same benefits in return . After all the majority of what we export to the EU are resources and agricultural goods. So the exchange in terms of long term economic development is not quite equal.
3. Finally we come to an issue which has not been raised in regards to cheese imports (blessed are the cheesemakers). Apparently Harper thought cheap European brie was a sufficient talking point to convince Canadians the deal was a good one. But if the underlying premise is to demonstrate the inefficiencies of supply side management in Canada, then how long can we expect the US, our other big free trade partner to sit on the sidelines before it demands the same provisions for its dairy farmers? Such an appeal could find a place in the NAFTA agreement which already allows for free trade of beef across our two borders . Its only a matter of time before free trade in dairy products follows suit and when that happens you can kiss your 4 liter milk in the bag good bye.
Professor of International Affairs,
CDFAI Fellow and Editor – Canadian Foreign Policy Journal