CANADA SIGNS TRADE DEAL WITH THE EUROPEAN UNION CALLED THE COMPREHENSIVE ECONOMIC TRADE AGREEMENT (CETA)

Today Sunday November 3, 2013.

On October 16, 2013 the Conservative government announced in its Speech of the Throne that Canada would soon be concluding negotiations on the Comprehensive Economic and Trade Agreement (CETA) with the 28-member European Union (EU).

Two days later, Harper announced that an agreement in principle had been reached with the EU.  “This is a big deal.  Indeed, this is the biggest deal our country has ever made” said Stephen Harper while in Brussels to sign the deal with European Commission president José Manual Barroso.

WHAT IS CETA?

CETA is an acronym for Comprehensive Economic and Trade Agreement and represents a free trade and investment pact that Canada and the European Union have been negotiating since May 2009.  It is the biggest bilateral trade talks since the North American Free Trade Agreement (NAFTA) which was signed by the Mulroney Conservative government in 1994. Harper said that the deal will increase the number of countries in free-trade agreements with Canada from 14 to 42.

The impetus for CETA came from a joint Canada-EU study “Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership” which was released in October 2008.  In the same month, it was reported that a group of 600 corporations gave government officials a “wish list” of things they wanted to see adopted in CETA setting in this way the official bargaining agenda for the trade talks.

CETA reaches into all sectors of the economy and especially into certain sectors that NAFTA left untouched such as allowing European companies to bid for Canadian public contracts at all levels of government.  This means that the doors have now been left wide open for large scale privatization and deregulation while greatly increasing the investment rights of monopolies.   It also means that federal, provincial and local government policies that are in the public interest and which could limit the profit-making opportunities of the monopolies by being deemed barriers to competitiveness will be put at risk.

A top priority of the EU during the CETA negotiations was to gain unconditional access for European monopolies to provincial and municipal government procurement.  Canadian cities spend billions of dollars on water systems and infrastructure annually which means that there is a lot of money from taxpayers up for grabs by those monopolies.  During the CETA negotiations, the deal insisted that any contracts worth more than $310,000 for provinces, $630,000 for utilities at any level of government, and $7.5 million for construction, also at any level, must be open to EU bids.

At the time the deal was being negotiated, it was said that foreign monopolies would also be able to ignore or challenge local environment regulations, which in some cases might even be declared illegal.  European public-partnership consortiums would get new guarantees of access to municipal tendering to the detriment of local public interests.

Over 40 municipalities, including Toronto have opposed procurement rules in CETA that would ban “buy local” policies.   In May 2012, Toronto City council passed a motion asking to be shielded from the terms and conditions of the CETA deal.  The motion called on the Ontario government to negotiate a permanent exemption from the trade deal for the city.  The motion passed with a 36-5 vote.

The CETA trade agreement will eliminate 98% of all tariffs between Canada and the EU and is a potentially bigger trade deal than NAFTA which will give Canadian exporting monopolies preferential access to the EU and vice versa.  The 28-member EU constitutes a bigger market than the U.S and Mexico put together.  The U.S and Mexico, Canada’s NAFTA partners, had a combined output of $16 trillion in 2008 and some 400 million “consumers”.

According to the Conservative government, the CETA deal will provide Canadian exporting monopolies with preferential market access to more than 500 million “consumers” and to $17 trillion in economic activity within the EU.  When taken together with NAFTA, Canadian exporting monopolies will now have preferential access to more than half of the world’s economy.

The EU has said that half of its Gross Domestic Product gains will come from increase in trade flows after the elimination of 98 per cent of tariffs and from liberalized access to Canada’s service sector.  Noteworthy is the fact that the first eight months of 2013 saw Canada’s trade deficit with the EU at nearly $14 billion and economists have assessed that under CETA, the trade deficit can only be expected to grow.

Last year, Canada-EU trade totalled $90 billion.  European tariffs on Canadian exports are generally low at 2.2 per cent while Canadian tariffs are higher at 3.5 per cent. European exporting monopolies will save $670 million annually by the elimination of tariffs compared to $225 million for Canadian exporting monopolies.  The elimination of 98 per cent of tariffs also means an actual loss of $670 million in tariff revenues for the government.

Under CETA, Canada will lengthen patent protection for brand-name drugs produced by the EU pharmaceutical companies from 20 to 22 years which means that Canadians will have to wait longer for certain new drugs to become available as cheaper generics.  As a result, Canadians will lose a significant amount of money—close to $2 billion because of the extension of patent protection drugs from generic pharmaceutical manufacturers.

Auto monopolies operating in Canada will be able to sell up to 100,000 passenger cars tariff-free to the EU every year, 12 times their current limit.  While Canadian beef and pork producers will be able to export more of their produce to the EU such as an additional 50,000 tonnes of beef, the current quota being 15,000 tonnes and an additional 69,000 tonnes of pork, a substantial increase from their current 6,000 tonne quota, the Canadian dairy farmers and cheese producers have been left out to dry by the agreement.

As a matter of fact, Canadian dairy farmers and cheese producers have condemned the CETA agreement as Canadian dairy products and especially specialty cheese will suffer from the European’s access to the Canadian market with an additional tariff-free 16,000 tonnes of cheese for a total of 29,000 tonnes.  Canadian dairy farmers and specialty cheese producers fear that with the EU flooding the Canadian market with European specialty cheese, that they will not be able to compete and will lose their businesses, many of which are part of Canadian regional economies.

On October 18, 2013 Stephen Harper issued a document “Summary of CETA Benefits” highlighting what he considers to be benefits for the Canadian people.  The document points out that the joint study released in 2008 stated that a trade agreement between Canada and the EU could boost Canada’s income by $12 billion annually and bilateral trade by 20 per cent.  According to the document, this is equivalent to creating almost 80,000 new jobs or increasing the average family’s annual income by $1,000.  However, these figures have been contested by several economists especially by some close to the trade-unions who say that these figures are not very credible.

According to this document, known direct investment by Canadian monopolies in the EU totalled $180.9 billion at the end of 2012, representing 28.5 per cent of Canadian direct investment abroad.  The same year, known direct investment by European companies in Canada totalled 171.5 billion, representing 24.1 per cent of total foreign investment in Canada.

Harper says in the document “CETA’s investment chapter will provide Canadian and EU investors with greater certainty, stability, transparency and protection for their investments, while preserving full rights for governments to legislate and regulate in the public interest.  This will lead to greater two-way investment, which will help create jobs and long-term prosperity for hardworking Canadians”.

A review of statistics on foreign ownership by Statistics Canada shows that foreign ownership of the Canadian economy is rapidly increasing from one year to the next. Under CETA, it will also be easier for EU monopolies to take over Canadian businesses.  The threshold that triggers a government review of a foreign take over will be set at $1.5 billion for European monopolies as opposed to $1 billion for everyone else.

In a press release dated October 22, 2013 the Canadian Bankers Association welcomed the trade deal as it will give “an opportunity to Canadian exporters access to 500 million “consumers” in 28 countries”.  It said “Canada’s well-capitalized banks are in a strong position to support the expanded economic activity arising from this opportunity”.  It further added “just as our banks supported Canada’s economic recovery from the recent global recession, they have the capacity to provide a wide range of business credit to Canadian exporters and their suppliers”.  The Canadian Bankers Association works on behalf of 57 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada.

Characterizing these trade talks between Canada and the EU is the fact that they were carried out in complete secrecy throughout the four years of negotiations with some occasional leaked documents and this despite repeated demands from the Canadian people that the content of these trade talks be revealed and that the people should have a say on such matters greatly affecting them and the future of the Canadian economy.

To this day, no text of the agreement has been provided for review by the body politic.  The only thing which is available on the subject is the document referred to above and a 26 page “technical summary” that was tabled last week in the House of Commons by the Prime Minister.

It could take 18 months to two years before the deal is submitted to the Canadian parliament and to the 28-member EU for ratification.  Despite calls for debate by the opposition, International Trade Minister Ed Fast said the “parameters of the deal are set and won’t change”.   He said legislation to ratify the deal would be tabled in the Commons and there would be a “fulsome” debate before it is passed, but repeated Harper’s remarks that there would be no substantive changes permitted.

All indications are the government will seek to ram it through Parliament without any consultations being held with the Canadian people.  The government has made no plans for public hearings on the subject and will be trying very hard not to make it an electoral issue.

CETA IS ALREADY BEING DENOUNCED BY MANY AND CUPW HAS EXPRESSED CONCERNS THAT POSTAL SERVICES HAVE NOT BEEN FULLY PROTECTED BY THE AGREEMENT.

The following are statements and press releases from concerned groups regarding CETA. CUPW has issued a bulletin dated October 18, the same day the government made the announcement that an agreement in principle between Canada and the EU had been reached.

October 18, 2013.

Free Trade / Bulletin

The federal government has reached an agreement with the European Union (EU) on the Comprehensive Economic and Trade Agreement (CETA).  A leaked document indicates that CETA only partially protects postal services. Reports to date indicate that the agreement may also:

  • Unfairly restrict how local governments spend money and ban “buy local” policies.
  • Add up to $3 billion to the price of drugs.
  • Increase Canada’s trade deficit with Europe, leading to significant job losses.
  • Undermine protections for health care and culture.
  • Create pressure to increase privatization of local water systems, transit and energy.
  • Allow European corporations to challenge our laws, policies and programs through investor-state provisions, including environmental and health measures.

Next steps?

Media reports indicate that CETA still needs some fine-tuning to make it legally coherent and that it could take another 18 to 24 months before the EU gives final approval to this trade deal. Canada is expected to follow a similar time frame. Normally, our federal government tables international agreements like CETA in the House of Commons prior to ratification.  Once the government tables a trade deal, the House has 21 sitting days to consider it.  But the government retains authority to decide whether to ratify an agreement after the parliamentary review.

What we know

CUPW has not seen the final text, only a few leaked documents. We should know more once the government publicly releases CETA.

We do know that all services are covered by the provisions of CETA, unless our federal government takes a reservation in an annex to the agreement.

What about postal services?

In July, a federal government representative told CUPW that Canada had taken an Annex II reservation for postal services. However, a leaked document indicates that the government has moved to a weaker Annex I reservation.

An Annex II reservation would have protected existing or future non-conforming measures and allowed for future policy changes. For example, an Annex II reservation would have given our government the policy flexibility to reverse postal deregulation that is not working.

Instead of adopting this stronger provision, it appears that Canada has taken an Annex I reservation that will protect Canada Post’s existing exclusive privilege to handle letters, but lock in this or any future government’s decision to deregulate Canada Post.

The union will provide an update on CETA and postal services once the government publicly releases the text of the agreement.

In Solidarity,

Denis Lemelin

National President

Stop the CETA Giveaway

-Statement by the Dairy Farmers of Canada, October 16, 2013.

Proposed CETA Deal Will Put Small Local Canadian Cheesemakers Out of Business

Dairy farmers will not support the Harper government agreeing to a deal with the EU that gives away the Canadian cheese market that Canadian dairy farmers and cheese makers have worked so hard to develop over the years.

Dairy Farmers of Canada is angered and disappointed with this news as the reality is that Canada would lose its small, artisan and local cheese makers and a world-leading industry with top quality products – within a short time frame. If this deal proceeds, the Canadian government will have given the EU an additional exclusive access of 32% of the current fine cheese market in Canada, over and above the existing generous access.

This deal would displace our local products with subsidized cheeses from EU and risk our small businesses being shut down or put out of business. This is unacceptable.

This potential deal is a loss for Canadian dairy farmers and industry. It would take income from Canadian dairy farmers and their communities and give it to the European industry. With this loss of farm income and squeeze on cheese makers, it is also taking economic development and jobs from Canadian communities.

For farmers, for communities and for every region of this country, there is no positive result to giving any additional access on cheese to the EU. Not when:

  • The EU already has a large proportion of the Canadian cheese market. Canada’s TRQ already allows imports of 20,412 tonnes of cheese tariff-free. Two-thirds of that is already allocated to the EU.
  • Consumers will not see any difference in price as a result of this CETA giveaway as the vast majority of EU cheese already comes into Canada with little or no tariffs.

Our farmers are demanding that the government matches its actions with its words by standing up for Canada and the Canadian dairy industry by not giving away this flourishing Canadian cheese industry and its contribution to local economies.

What’s Wrong with CETA?

CETA undermines our rights as citizens”

-Concerned citizens of Newfoundland and Labrador, in partnership with the Council of Canadians and Health Coalition of Newfoundland

 

1.  Loss of Sovereignty: CETA will restrict the right of elected governments at all levels to introduce regulations in the interest of the public if they violate any of the rules laid out in the agreement. This makes it difficult for governments to react to unforeseen crises or environmental hazards.

2.  The Corporate Hijacking of the Law: The Investor Rights chapter of CETA will allow European corporations to bypass the respected Canadian court system in favour of offshore tribunals over which we have no control. “Profiting from Injustice,” a 2012 report by Corporate Europe Observatory details the rampant conflict of interest and corporate bias of these tribunals.

3. A Biased Negotiating Process: Over the four-year negotiating period, no discussion took place between the public and governments around CETA issues in spite of repeated requests. But lobbyists for over 600 global corporations were privy to, and helped shape, the negotiations.

CETA has been designed to increase the power and profits of corporations 

1.  Loss of Jobs. Independent studies indicate that the 2008 computer model used by the federal government to predict future employment in a post-CETA world is seriously flawed and certainly out-dated. The 2010 Canadian Centre for Policy Alternatives study (itself out-dated given the deteriorating economic situation in Europe) indicates Canadian job losses of 30,000 to 150,000 (depending on currency values), mostly in the manufacturing or processing sector.

2. Increased corporate access to public spending: Expect increased access by European corporations to public spending right down to the level of municipalities and school boards. Water and waste- water management may be particularly at risk of being partially privatized given the federal government’s enthusiasm for linking municipal funding to P3s. P3s disadvantage local businesses that don’t have adequate investment capital.

3.  The illusory benefits of increased investments and increased exports: Most Canadians don’t know that 90% of American investments in Canada in the first 10 years after NAFTA did not create new businesses. They were for “takeovers” of existing businesses (often followed by downsizing and precarious employment). Or that when farm exports increased by 300% post-NAFTA, the benefits went to foreign corporations. Farm debt actually increased by 300%. Without knowledge of the details of CETA, how do we calculate the real costs and benefits to our economy?

Many of us feel that there is a creeping and silent power shift going on. It’s leading away from sovereign nation states and democracy and shifting towards corporate empire. Trade agreements like CETA are one of the most effective tools global corporations have to facilitate this shift.

In conclusion, CETA like any other free trade agreements give global monopolies the freedom to wreck the economy, privatize and degrade social programs, change regulations governing corporate behaviour, and do whatever else serves their narrow monopoly interests.  CETA just as NAFTA is not in the interests of the Canadian people.  The only alternative is self-reliance and trade for mutual benefit between nations considered equal whether they are big or small.

Building a self-reliant economy requires a sound foundation in manufacturing that can guarantee the well-being of the people under all circumstances.  Crucial to a self-reliant economy is the right of the Canadian people to control and make all the decisions that affect the socialized economy including the social and natural environments.

Only then will trade among nations be based on mutual benefit and not on benefitting the monopolies and the self-interest of big nations at the expense of the small.   Aside from demanding an immediate STOP TO CETA, postal workers should fight for a modern definition of trade as outlined above.

In Solidarity,

Danielle Desormeaux

hoffddesormeaux@gmail.com

Feel free to add to the discussion.