Canada-EU deal could be bigger than NAFTA

The current Canadian/EU trade talks taking place in Prague may be labelled a “trade agreement,” but make no mistake, it has far wider implications.

The current Canadian/EU trade talks taking place in Prague may be labelled a “trade agreement,” but make no mistake, it has far wider implications.

While we have to wait and see just what the EU will agree to, there is no denying that this will be a significant agreement.

The talks seek to more closely align Canada and the EU especially as in those areas such as sustainable development, the movement of people and intellectual property. Though trade is a strong focus – the EU is Canada’s second largest trading partner after the US, with a total of C$109.4 billion in trade in 2007, making Canada the EU’s eleventh largest trading partner – the “soft” agreements on sustainability and labour mobility are actually of most interest.

Changing the rules governing trade to remove barriers, especially in services, could be mutually beneficial. In fact, a study commissioned by the government of Canada suggests that changing the rules could yield $18.26 billion for the EU and $12.9 billion for Canada in terms of additional GDP contributions, with services leading the way. This would require the elimination of tariffs on bilaterally-traded goods, easing restrictions on services and opening up competitive bidding on government contracts to EU companies and giving equal access to such contracts for Canadian companies bidding in the 27 countries of the EU.

Behind this focus on trade is also a desire to strengthen intellectual property protection, a more effective enforcement of labour laws, the focused enforcement of the environmental protection legislation and the freer movement of labour.

In particular, there is a desire to make it easier for Canadians to serve as executives for European companies and more efficient tax arrangements for individuals moving between Europe and Canada.

Also on the table is the possibility of increased foreign ownership in media and airlines, the regulation of financial services and the encouragement of foreign direct investment by the EU in Canada and Canadian in the EU.

Canada already has several other agreements with the EU – on science and technology, on aviation and on cultural exchanges. But this new agreement will be substantive and very comprehensive – all provinces, except Newfoundland and Labrador, have signed on to the framework for the agreement and have participated in shaping the key agenda for this week’s talks.

There are significant concerns, however, including the implications for Canada’s fisheries and fur trade and for environmental protection under the terms of the treaty. Newfoundland is concerned that EU fishing fleets may have too easy an access to an already stressed fishery while others are concerned that the EU will force Canada into a “green” strategy that is not in keeping with the economic interests of Canada.

For many, including the Canada-EU Business Council, the agreement is more substantive than the NAFTA agreement, but is moving through a process of negotiation almost unseen by the public.

Stephen Murgatroyd writes for the Troy Media Corporation.

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