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CETA is headed down the mine shaft

CETA is headed down the mine shaft

CETA is headed down the mine shaft

by The Hon. Joe Volpe, Publisher

TORONTO – I’m willing to bet that you are among the 99.999% of Canadians who, until Friday, October 21, did not know there was a place called Wallonia.

We all know now. Its citizens just said thank you Canada, but no, thank you; we don’t think a free trade agreement with Canada serves our interests.

Years of negotiations seemingly flushed away. Did they have jurisdictional authority to put the brakes on a “free trade deal” between the biggest economy in the world – Europe – and a significant, but relatively minor player – Canada – anxious to join the club? The answer is an unwelcome yes.

Each of the member states in the European Union is required to all have their national Parliaments ratify the Deal before it can become operative. Individual member States have their own internal “approval systems” procedure before the vote comes to a head in their respective national, legislative body.

Wallonia is a constituent region of Belgium. It is not as well known to Canadians as Flanders, whose fields were immortalized by Canadian poet-soldier, John McCrea. It is highly industrialized, with about 55% of the total population of the country.

For Walloons, as for other Europeans, Free Trade issues relate to free movement of goods, services and labour. One of their concerns, according to “insiders” who profess to know, was apparently Canada’s Immigration and “labour mobility” policy. Unless the Europeans bring pressure to bear on Belgium to convince one of its “provincial governments” to change its mind, this Deal could be dead.

It may be a tough task. According to Government of Canada Trade and Investments Activity (most recent complete data,2004-2009), Canada exported merchandise valued at $1.9 Billion to Belgium and import the merchandise from there valued at $1.45 Billion.

Belgians sell “finished products”. We sell Primary Resources. In fact, we have a negative trade balance in every sector except that. But we compete with Belgians in some crucial machinery sectors (aviation and rail car fabrication).

World-wide, Canada’s trade impact is small (about 2.6% of merchandise exports, and 2.7% of merchandise imports), and the bulk of it is North American in nature: the USA consumes 76.7% of our exports and provides us with 53.3% of our imports. Moreover, more than half of this merchandise trade is the result of activity produced by Foreign Affiliates – foreign companies operating out of Canada.

Understandably, some Europeans find it hard to distinguish Canada from the USA on the International Trade scale. That means that the CETA is potentially more important for us than it is for them. It also means that some of them (the Walloons, for example) might see CETA as an American incursion (by stealth) into Europe. For those, this is akin to placing the cart before the horse: better to wait for the USA-Europe negotiations to run their course, than to let them benefit from CETA through side benefits as a NAFTA partner of Canada.

On this side of the Atlantic, there are those prepared to challenge the CETA because the extraterritorial rights it accords to countries operating globally will, in their view, infringe on Canadian sovereignty. They are preparing to challenge the Federal Government’s authority to ratify such a deal – all the way to the Supreme Court, if need be.

Unless the Walloons change their minds, we’ll never know whether these Canadians have a case.

(Monday 24 October 2016)

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