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CETA would worsen inequality, fuel the racist right

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) will worsen inequality.

War on Want  trade campaigner Mark Dearn writes, “[Today] the International Labour Organization reports that the top 10% of highest paid workers in Europe together earn almost as much as the bottom 50%. Last week, the European Parliament’s Employment and Social Affairs Committee found that the EU-Canada trade deal CETA will only make this situation worse, ‘widening the incomes gap between unskilled and skilled workers thus increasing inequalities and social tensions’. The cross-party committee points to CETA triggering potential job losses of more than 200,000 across the EU.”

Dearn criticizes the European Commission and members of the European Parliament for supporting “policies that generate inequality and, in turn, fuel the racist right”.

This past September, Canadian Centre for Policy Alternatives trade and energy researcher Hadrian Mertins-Kirkwood highlighted a report by the Global Development and Environment Institute at Tufts University.

He wrote, “The new Tufts study of CETA uses an economic model that actually accounts for the likely impacts on inequality, employment, wages and more. Four things stand out from their results. First, the study finds that CETA will transfer 1.74% of national income from labour to capital in Canada. That means any economic gains from CETA will flow overwhelmingly to owners of capital rather than to workers, which will exacerbate inequality. Notably, the projected effect of CETA on inequality is significantly worse in Canada than in any major EU country.”

Mertins-Kirkwood adds, “[Second], the study projects a net loss of 23,000 jobs in Canada in the first seven years of CETA… Third, due to rising inequality and unemployment, the average income in Canada is projected to fall by up to €1,788 ($2,650) by 2023. Again, it will be workers who feel the brunt of income losses, not the owners of capital. [And fourth], Canada will actually experience slower GDP growth under CETA than it would outside of the agreement.”

Despite this, Prime Minister Justin Trudeau is determined to implement CETA.

Today, Toronto Star national affairs columnist Thomas Walkom wrote, “Justin Trudeau promised neo-liberalism with a human face. Those weren’t the words he used. But the phrase expresses the gist of the election campaign he successfully waged just over a year ago. In that campaign, Trudeau said his Liberals would pursue most of Conservative Stephen Harper’s economic goals — including resource exploitation, pipelines and free trade. But they would do so in a way that distributed the proceeds more equitably. In effect, he promised to be Tony Blair to Harper’s Margaret Thatcher — doing much the same as his political nemesis, but in a more acceptable manner.”

That may also be why the federal Liberals and Conservatives are cooperating to pass C-30, the implementing legislation for CETA in Canada.

Beyond Canada, CETA still faces ratification votes in the European Parliament (now scheduled for February 1-2) and in 38 national and regional parliaments over the next five years.

Significantly, just after the signing of CETA on October 30, The Globe and Mail reported, “[It has] emerged [that CETA] could be scrapped at any time before final ratification… Final ratification is still required by the European Parliament and the legislatures in each EU member country… The EU and Belgium have now agreed that any one of Belgium’s [three] regions can scrap CETA at any time before the final ratification vote if MPs don’t believe CETA is working… That would effectively kill the treaty because it would mean Belgium couldn’t ratify it.”

A referendum on CETA may also take place in the Netherlands next year. The Guardian has reported, “Activists in the Netherlands have gathered almost two-thirds of the signatures needed to lay the groundwork for a referendum on [CETA]. The petition can only be launched once parliament has ratified the deal, something that is not expected before parliamentary elections due in March 2017.”

In fact, any country could scrap CETA during the anticipated five year provisional application period.

The Council of Canadians will continue to active in both Canada and Europe to stop CETA and the economic inequality it would bring.