FREDERICTON, N.B. Nov. 3, 2016/ Troy Media/ – The Comprehensive Economic and Trade Agreement (CETA) is the right deal for Canada’s economy now – and it’s essential for the nation’s future prosperity.
The near-death experience of CETA, the trade deal between Canada and the European Union (EU), exposed the economic frailties of negotiating multi-boundary free-trade deals. The more countries around the table, the more chances of a long, cumbersome process.
In fact, CETA was almost scuttled when the regional parliament of Wallonia in Belgium initially rejected the pact, which has been seven years in the making.
As Halloween approached, nothing was as scary as the potential collapse of this unique opportunity to open up new export markets for Canada in Europe.
CETA will promote the free movement of goods, services, investment and labour for Canada.
The EU consists of 28 countries, including such economic luminaries as Germany, France, Austria and Sweden. Despite its current financial malaise, the union will remain an economic powerhouse. With a population exceeding 500 million people, it’s one of the world’s most lucrative consumer markets. It has a combined gross domestic product of $17 trillion.
But it’s worth noting that CETA is simply an economic opportunity, not a guarantee of success. It opens the door for enhanced trade with one of the world’s most coveted export destinations. Transforming this opportunity into a success will require the vision and smarts of our entrepreneurs, and the competitiveness of our products and services in terms of price and quality.
Indeed, CETA is a role model for countries around the world that embrace the benefits of international trade for their citizens and have strategically used free-trade agreements as empowering tools to grow their economies.
For Canada, CETA offers distinct economic opportunities. Our over-dependence on the U.S. export market creates a serious economic vulnerability. The new deal gives Canada an opportunity to diversify and extend our trade, opening up new European markets for our products and services.
Small and medium-sized businesses are the backbone of the Canadian economy and the leaders in job creation. They should be major beneficiaries of CETA. Building economic bridges and establishing links with foreign markets is financially prohibitive for small enterprises on their own, but as a group they can make those connections.
Canada has several strong sectors that will thrive in the EU marketplace. These include the seafood and forestry industries, agricultural frozen and processed foods, IT, pharmaceuticals and the auto industry. Canada’s outreach to the EU should concentrate on elevating exports of value-added merchandise and our knowledge sector.
CETA will give Canada unrestricted and preferential access to the EU markets. Removing tariffs will enhance our ability to be truly competitive in Europe. All of this will accelerate economic growth and job creation in Canada.
The bad news is that the CETA roller-coaster ride isn’t over. The ratification process may still hold some surprises.
Canada’s Parliament is expected to ratify CETA quickly. Both the governing Liberals and the Conservatives have enthusiastically embraced the deal and played a role in its creation.
The problem, again, rests in Europe. CETA’s passage through the European Parliament and all 28 member countries will likely not be smooth sailing.
We are in for some more uncertainty before Canada can enjoy the economic benefits that CETA promises.
Constantine Passaris is a professor of Economics at the University of New Brunswick and a national research affiliate of the Prentice Institute for Global Economy and Population at the University of Lethbridge.
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