Postmedia News reports that, “Trade Minister Peter Van Loan defended on Thursday the federal government’s assertion that a Canada-European Union trade deal will add $12 billion to Canada’s annual wealth by 2014. The estimate, included in a 2008 joint Canada-EU study, is coming under criticism from analysts, with one describing it as a ‘sales pitch’ that doesn’t take into account the impact of Europe’s debt crisis and the slide since 2008 in the euro currency.”
1-“Swiss Institute for International Economics Director Simon Evenett said, ‘The number is almost certainly suspect.’ …Evenett, who believes a Canada-EU deal will be positive but on a more modest scale, noted that the 2008 study was based on aggressive assumptions about the reduction of tariff and non-tariff barriers.”
2-“Canadian Auto Workers economist Jim Stanford noted that the study doesn’t take into account the sharp rise in the Canadian dollar since 2008. ‘There’s no consideration of the fact our products are 20 per cent more expensive relative to Europe than we were just a couple of years ago,’ Stanford told Postmedia News. ‘It is more of a sales pitch for why we should be doing this.’”
3-“A Library of Parliament study has also raised questions — though it didn’t take a position on whether the $12-billion figure is too high or too low. ‘The Canada-EU joint study was completed before the global financial and economic crisis and does not reflect the impact of the crisis, nor of the debt crises facing several EU member states,’ wrote Alexandre Gauthier and Michael Holden in a report that advised ‘caution’ in relation to the projection.”
“The 2008 analysis assumed an aggressive agreement that would include the complete elimination of all tariffs on goods, including agricultural products, a partial cut in non-tariff barriers, and a partial liberalization in trade in services, according to the Library of Parliament analysts. The 2008 study also assumed in its calculations that the Doha Round of negotiations at the World Trade Organization would be successful. The Doha talks had been stalled for two years before a recent push, in the midst of much skepticism, for a deal by the end of this year.”
To read Council of Canadians trade campaigner Stuart Trew’s commentary on this, please go to http://canadians.org/tradeblog/?p=1254. While Stuart and I were in Europe last week we were confronted with bemusement over the $12 billion figure. ‘You have a $1.556 trillion dollar GDP, and you would give up so much under CETA for less than a percentage point (.77 percent) GDP increase?’, we heard.
The full article is at http://www.vancouversun.com/business/Canada+windfall+with+deal+Loan/4179316/story.html.