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CETA’s promise of 80,000 jobs doesn’t add up

The Hardy Boys: A Figure in HidingBy Maude Barlow and Sujata Dey. Published on Huffington Post

With every new free-trade agreement comes the promise of shiny new jobs and economic prosperity.

CETA, the Canada-European Union Comprehensive Economic and Trade agreement, is no different.

Ed Fast, Minister of International Trade, has repeatedly promised an 80,000 job windfall from CETA. A Google search shows that this is one of the government’s main CETA talking points. According to Blacklock’s Reporter, “The Prime Minister’s Office in 2013 first cited the jobs claim after signing the Canada-European Union Comprehensive Economic & Trade Agreement.”

Suspicious, Liberal Senator Céline Hervieux-Payette hired an economic sleuth to track down the numbers. Wednesday, they came up…empty. Worse, similar job creation claims by Export Development Canada were based on stale 2004 figures, which predate the 2008 economic crisis whose tectonic forces drastically impacted Canada’s manufacturing and export landscape.

In Radio-Canada article, Hervieux-Payette says that the “official” numbers are actually fictional. Her study reports that is “impossible to verify the calculation.” Furthermore, “the data and methodology used are not accessible to neither the public or Parliament.” [Free translation]

In Le Devoir reported the Senator as saying, “Nowhere in the documents does the federal government demonstrate how it came to promise that 80,000 new jobs would see the day thanks to a commercial agreement with Europe. All the references to this data originate in the testimony of International Trade Minister Ed Fast to the 2011 parliamentary committee. The promised figure has never been supported either by statistics or economic data.” [Free translation]

But surely the government must have a source? Again, the government sent Le Devoir their figures.

“The Trade Minister had sent to Le Devoir, a paragraph restating these same statistics. The e-mail referred back to the preliminary CETA study conducted by the European Commission and Canada. Now, that is exactly the same study which ‘does not mention the 80,000 jobs supposedly arising from the agreement.'” [Free translation]

In other words, they sent the reporter in a circle.

Many economists have sent out search parties for the 80,000 jobs and have also come up cold. Jim Stanford, Unifor economist, has said that the job projections are out of SimCity, not the real world. “The subsidiary claim that CETA will produce 80,000 new jobs is more than unrealistic. It is intellectually dishonest.”

Many economists and commentators have questioned the veracity of economic models of trade agreements saying free trade’s returns have been overestimated.

An article in the New York Times states, “It is one of the basic principles of economics that trade is good and more trade is better. But…some economists have come to doubt the relevance of that orthodoxy. The costs of globalization have been greater and more enduring than they expected, and government efforts to mitigate the impact on American workers have often proved insufficient.”

In the article, Joseph Stiglitz, a Columbia University economist and Nobel laureate, said the magnitude of these losses was large enough that increased trade may now be harming the American economy. “The argument was always that the winners could compensate the losers,” Mr. Stiglitz said. “But the winners never do. And that becomes particularly relevant when we have a society with as much inequality as we have today.”

The Council of Canadians‘ campaign against CETA.