Part 1 in a two-part series
How times have changed. Back in 1988, an election was forced by Liberal leader John Turner, who said the Senate — which had a Liberal majority at the time — would not approve the legislation necessary to enable U.S.-Canada free trade.
The Progressive Conservative government won that election, and I introduced, as trade minister on behalf of the Mulroney administration, the necessary legislation which passed through Parliament in January 1989 with respect to Canada and the United States. Mexico was to join the arrangement later.
This month’s announcement, and the positive and ecstatic reception, is certainly vastly different from the long battle to achieve first the U.S.-Canada free trade agreement and then the North American Free Trade Agreement (NAFTA).
And it is, as Prime Minister Stephen Harper quite rightly points out, a “historic win for Canada.”
Under this Comprehensive Economic Trade Agreement (CETA), and factoring in NAFTA, Canada will have preferential access to more than half of the world’s economy.
As the prime minister has said, the deal will increase the number of countries in free trade agreements with Canada from 14 to 42.
The joint study that was done by Canada and the European Union during the course of the negotiations estimates that trade between Canada and the EU will increase by an estimated 20 per cent, it will add a $12-billion boost to the Canadian economy and create 80,000 new jobs.
It is of equal importance that Canadian families will have greater access to European goods at a lower cost, as 98 per cent of tariffs, both ways, will be removed immediately after ratification, the prime minister has said.
This agreement includes full access to EU markets for Canadian fresh and frozen fruit and vegetables, and processed foods, as well as full access to EU markets for Canadian wheat, oats, barley, rye and canola oil.
It will also grant full access to EU markets for Canadian dairy farmers, although both sides will have to exclude the poultry and egg sectors which, as most people realize, have resulted in excessive prices that are costly to consumers, with protection under the Canadian supply management policy for many years. The government is considering compensation for Canadian dairy farmers if they lose money because of the agreement.
Canadian beef producers will be able to sell an additional 50,000 tonnes of beef — the current quota is 15,000 tonnes. Canadian pork producers will be able to export 75,000 tonnes to the EU, a substantial increase to the current 6,000-tonne quota.
While it is clear that negotiations are not yet finished, since some areas of the agreement still need drafting while others need fine-tuning, as reporters were told in a briefing, the most contentious points have been settled.
Now the agreement text will have to be drafted and approved by lawyers and translated into 22 languages for the 28 EU countries to examine, as well as our 10 provinces and Parliamentarians.
The document, signed by Mr. Harper and European Commission President José Manuel Barroso a week ago, is an agreement in principle and full ratification is thought to be two years away.
Another important provision in the deal, which should be noted, provides that if any country negotiates a better deal with the EU, those provisions must automatically apply to Canada. This is important to us because the EU and the U.S. recently started talks for a similar-style agreement.
This agreement has received approval in all sections of the news media across Canada, and with almost all economic groups, including those in our fisheries union and processors, and certainly with the Government of Newfoundland and Labrador.
Newfoundland cabinet ministers and Premier Kathy Dunderdale have stated, led by Fisheries Minister Keith Hutchings, that the new deal “is the best thing to happen to the Newfoundland and Labrador fishery in decades,” and that “local producers will have new opportunity to sell their product into the richest seafood market in the world.”
The biggest news is on shrimp, which now faces prohibitively high trade barriers, as Newfoundland product can only be sold in bulk, but once CETA is in effect we will be able to package and process and sell our shrimp for added value for sale to the EU.
Hutchinson explained that, “Europe is not a concern for the province with reference to processing competition because their labour and energy costs are higher than ours.”
Industry representatives, such as the Fish, Food and Allied Workers (FFAW), the Association of Seafood Producers and the St. John’s Board of Trade, all are optimistic about this trade deal. Premier Dunderdale has called it “a milestone achievement.”
At present, only 13.1 per cent of products exported to the EU enter duty-free.
Derek Butler, the Association of Seafood Producers’ executive director, has pointed out that Europeans eat more seafood than do North Americans, so it is a rich market to sell into, and that “the province has punched well above its weight.”
FFAW president Earle McCurdy has said “this, for the most part, removes those disadvantages and gives us a fighting chance.”
When the next two years pass and the pact is ratified, 98 per cent of EU tariffs for Canada will be reduced to zero.
When these two competitors agree, it’s a great accomplishment with great potential for Newfoundland’s economy, and especially the fishery.
Next week: past and future
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