Globe and Mail columnist Neil Reynolds writes today, “In its ‘draft final report’ on the social, environmental and economic consequences of a free-trade agreement with Canada, a European Union-commissioned panel of trade experts has calculated that the economic gains would be only half as large as economists imagined when negotiations began in 2008. This abrupt correction induced the Council of Canadians to accuse Prime Minister Stephen Harper of selling out the Canadian economy – in the midst of a federal election – ‘for a measly $6-billion’, half the previously anticipated gain in GDP. As calculated by the EU panel, the trade agreement would boost GDP only marginally: perhaps by 0.29 per cent, perhaps – best case – by 0.36 per cent.”
On March 30, Postmedia reported, “The draft study supports the contention of economists who argued earlier this year that the Canadian government’s frequent claims of a $12-billion windfall in annual wealth for Canada by 2014 is ’suspect’ and a political ’sales pitch’. …Furthermore, the impact assessment’s projected payoff won’t be reached until the year 2020 rather than 2014. ‘Harper should explain why his government is ready to sell out Canada’s farmers, municipalities and public services for a measly $6 billion, or half what he wants to give away in corporate tax cuts over the coming years,’ Council of Canadians spokesman Stuart Trew.”
Reynolds argues, “This measly $6-billion would be gained almost effortlessly every year, expanding Canada’s real GDP (for example) by $60-billion every decade. Measly, indeed.” But he doesn’t note that the EU report also says, “(CETA) will clearly reduce regulatory flexibility in Canada” by preventing governments and public bodies from favouring local suppliers, it could reduce economic, social and “potentially environmental policy space”, and it will mean higher prescription drug prices for Canadians if EU demands for intellectual property rights/ patents are accepted.
And while Reynolds says CETA will bring “more wages, more mobility”, he doesn’t reference a Globe and Mail article from this past October which notes, “Canada, which has run an annual trade deficit of $19-billion with the EU, on average, for the past 10 years, would lose 28,000 jobs – most of them in manufacturing – if tariffs were eliminated, says a study done by Canadian Auto Workers economist Jim Stanford for the Canadian Centre for Policy Alternatives (CCPA). …The loss of 28,000 jobs is the best-case scenario in Mr. Stanford’s study. The worst-case scenario is the elimination of tariffs, plus the Canadian dollar maintaining the 18-per-cent appreciation in value against the euro it has averaged this year compared with where the currencies were trading when negotiations on a deal were announced in March, 2009. Under those assumptions, a Canada-EU free trade agreement vaporizes more than 152,000 jobs.”
Reynold’s page B2 column in the Report on Business section can be read at http://www.theglobeandmail.com/report-on-business/commentary/neil-reynolds/free-trade-is-not-a-measly-concept/article1982417/. To send a 200-word or less letter to the editor to the Globe and Mail, e-mail firstname.lastname@example.org.