The Globe and Mail reported yesterday that, “A high-powered group of auto executives is pushing Ottawa to halt free-trade talks with South Korea and the European Union and to offer incentives for an industry threatened by the rising dollar and growing competition from lower-cost markets.”
This morning the newspaper reports, “Industry Minister Tony Clement has promised that the federal government will take the auto industry’s concerns about free trade with South Korea and the European Union into account before signing any deals. ‘We will not sign a trade agreement unless it’s in Canada’s interest,’ Mr. Clement said on Friday…”
Today’s article explains that, “The pace of recovery has improved, but auto industry executives are worried about the potential free-trade deals, the rise in the value of the Canadian dollar, high electricity costs in Ontario, and investment bypassing Canada and flowing into Mexico and other low-cost locations. …The potential free-trade agreements with South Korea and the European Union are a relatively new irritant, although the CAW has been arguing for more than a decade that Canada should slow the flow of vehicles imported from outside North America. …If negotiations lead to a deal and Canada gives up the 6.1-per-cent tariff it imposes on vehicles imported from outside the North American free-trade agreement, South Korean and European manufacturers would gain an advantage on the two Japanese companies. Honda and Toyota assemble vehicles here, while the South Korean and European companies do not.”
Clement made the comments after meeting with Magna International Inc. chief executive Don Walker, Ford Motor Co. of Canada Ltd. president David Mondragon, Canadian Auto Workers president Ken Lewenza, “and senior officials from the other four auto makers that manufacture vehicles in Canada.”
In the Financial Post, columnist Terence Corcoran laments that, “Current CAW chief Ken Lewenza told the Financial Post’s Scott Deveau on Friday that free trade in autos could only occur when Canadian manufacturers export as many vehicles into the Korean market as are imported from there to Canada. Until then, Ottawa should not even entertain a free trade agreement with Korea, or with the European Union.”
Maclean‘s columnist Paul Wells writes that, “It turns out that the heads of Magna and the Big Five automakers have decided to argue, with a straight face, that Canada will be more competitive if it trades less and subsidizes its heavy industry more. …As for CETA, (they say) ‘Canada requires a more sophisticated and less-idealistic view of free trade with Korea and the European Union.’” Wells concluded his column with, “That’s the end of (the Canada-EU) trade deal.”
The web-links are at http://www.theglobeandmail.com/globe-investor/auto-executives-to-seek-ottawa-help/article1912245/, http://www.theglobeandmail.com/report-on-business/clement-to-weigh-auto-sectors-concerns-about-free-trade-deals/article1913673/, http://canadians.org/campaignblog/?p=6476 and http://opinion.financialpost.com/2011/02/18/terence-corcoran-international-brotherhood-of-protectionists/.
SERIOUS BLOWS DEALT TO THE CANADA-EU CETA NEGOTIATIONS
The move by the automakers is the latest development that may well derail the Canada-EU deal.
1- “An EU document released (in early February) cited recent research saying that (in Europe) 87 per cent of contracts for government-purchased goods and services, from fire trucks to syringes to educational services, went to domestic companies. …Simon Evenett, director of the Swiss Institute for International Economics, said the EU’s poor results suggest that ‘Canadian exporters, especially those that don’t have subsidiaries in Europe, won’t gain much from any negotiated opening up of the EU procurement market.’”, http://canadians.org/campaignblog/?p=6236;
2- While trade minister Peter Van Loan argues that CETA will add $12 billion to Canada’s GDP, a Library of Parliament study says, “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” and advises “caution” in relation to this projection, http://canadians.org/campaignblog/?p=6128;
3- An analysis by CAW economist Jim Stanford shows that CETA could mean the loss of up to 152,000 jobs in Canada, http://canadians.org/campaignblog/?p=5110;
4- A study by the Canadian Generic Pharmaceutical Association warns that the patent changes being sought by the European Union through CETA could potentially add more than two billion dollars to Canadian medication costs annually, http://canadians.org/campaignblog/?p=6309 and http://canadians.org/campaignblog/?p=5985;
5- The European Commission’s Sustainability Impact Assessment on CETA states, “The Canadian economy is energy and carbon‐intensive. The oil and gas sectors, notably the tar sands industry in Alberta, are in part responsible for the important increase in Canadian greenhouse gas emissions. Where the CETA contributes to greater extraction and investment in the tar sands, it is likely that Canada’s emissions of greenhouse gases will increase”, http://canadians.org/campaignblog/?p=6114;
6- The impact assessment also warns that CETA will open the door for European water utilities, such as giant transnationals Suez and Veolia of France, to privatize Canadian public water services and raise rates. Such companies would be able to challenge local water conservation and source protection rules, as well as bottled water bans, as unfair barriers to trade, http://canadians.org/campaignblog/?p=5864.
On February 11, Postmedia News reported that, “(A) report (by the House of Commons parliamentary committee on trade), based on a fact-finding mission to Europe in November, recommends that the Canadian government and Parliament step up efforts to lobby the 736-seat legislature that now has veto power over EU trade agreements (because of concerns being expressed by them about the tar sands, sealing, and visa restrictions on the Czech Republic). …The European Parliament, which holds sessions in Brussels, Belgium and Strasbourg, France, gained veto powers over trade deals in the Lisbon Treaty that took effect in 2009.” That’s at http://canadians.org/campaignblog/?p=6357.
