The Pitfalls and Promises of the Canada-European Union Comprehensive Economic and Trade Agreement

This paper analyses the text (CETA, 2010) in the areas of agriculture, services and investment, procurement, regulations, and manufacturing competitiveness. We find that market access would be marginal and adjustment costs high in all of these areas. Canada’s trade with the EU is already imbalanced, with resources comprising an increasing proportion or exports. Where Canadian manufacturing is already competitive, as in the case of transportation and aircraft, the CETA offers no new gains. If the goal of the CETA is to enhance Canadian competitiveness then the deal falls very short. Still it will have significant consequences for key Canadian sectors… The principle hypothesis of the paper, however, is that Canadian negotiators have learned little from past experience. Despite a vast academic industry analyzing the shortcomings and strengths in Canada with respect to the EU, all commentators underscore the problem of asymmetry. In the present circumstances the government has ignored this basic warning. For its part the EU is hoping to sign a “gold standard” economic pact that will build on its Korean and Indian experiences with free trade agreements. While giving European companies another stepping stone (after Mexico) into the U.S. market. But the regulatory and cultural baggage of NAFTA raises questions about whether the North American and European models can be bridged, and at what structural and political costs to both partners. As the smaller economy and weaker trading partner, Canada is treading new ground from its recent series of bilateral agreements with developing countries