CANADA’S TRADE HEADACHES CONTINUE. ITALY HAS BECOME THE LATEST COUNTRY TO LAUNCH A FIGHT, SAYING IT MIGHT NOT RATIFY A EUROPEAN TRADE AGREEMENT — THROWING THE WHOLE PROCESS IN DOUBT.
Focus turns to Pacific as CETA hits bump
OTTAWA • Italy has suddenly become the latest battle front in Canada’s trade wars, with the country’s new agriculture minister declaring Thursday that his country will not ratify the CanadaEuropean Union free trade accord, potentially threatening the 28-country deal.
“We will not ratify the freetrade treaty with Canada,” Gian Marco Centinaio told La Stampa newspaper. “Doubts about this deal are common among many of my European colleagues.”
About 98 per cent of the Comprehensive Economic and Trade Agreement came into provisional effect last September after Canada and the EU ratified it, so Canadian exporters can already try to take advantage. It still needs to be rubber-stamped individually by member states, but there is no particular deadline to do so.
Foreign Minister Chrystia Freeland said in Washington: “I’m confident we will have full ratification in the end,” noting that Austria was initially reluctant to ratify CETA, but eventually came around. She said she had a “good” conversation about CETA with Italian Prime Minister Giuseppe Conte during last weekend’s G7 summit in Quebec.
But coupled with the recent steel and aluminum tariff announcements by U.S. President Donald Trump, the Italians had effectively signalled that two of the world’s seven leading industrialized democracies have turned away from the idea of multilateral free trade.
In Ottawa meanwhile, the Liberal government sought to solidify potential new markets in Asia by introducing legislation to ratify the Comprehensive and Progressive Trans-Pacific Partnership. Trade Minister François-Philippe Champagne said: “there has never been a better time to diversify.”
Freeland left Washington with no real news on the North American Free Trade Agreement, despite having met with her U.S. counterpart. Although NAFTA remains in place and Trump has not made good on threats to withdraw time seems to be running short for a “modernized” agreement — in particular because Mexico is two weeks away from a presidential election.
Trump’s steel and aluminum tariffs continue to hang over Canadian and Mexican imports. Canada has scheduled retaliatory tariffs to take effect on Canada Day. Trump has meanwhile been investigating whether to punish auto industries outside the U.S. on the same “national security” grounds.
At home on Thursday, pretty much the entire political spectrum — including Ontario premier-designate Doug Ford, whose province is hard-hit by the current tariffs — was standing behind Freeland and Prime Minister Justin Trudeau.
The Commons was focused on the CPTPP, an 11-country pact signed in February. The original TransPacific Partnership had been negotiated with the U.S., but Trump withdrew shortly after his inauguration. The new version, which contains tweaks and the suspension of chapters important to the U.S., requires six parties to ratify it before a free-trade zone can be established.
“We are absolutely on track to be among the first six,” said a spokesman for Champagne. Mexico was first to ratify in April, Japan is well on its way and other countries, including New Zealand, appear to be aiming for the end of the year.
Even though it probably wouldn’t result in the CPTPP coming into effect sooner, the idea of fast-tracking legislation through the House (and the Senate) had been floating around Ottawa this week. Trudeau’s principal secretary Gerald Butts tweeted that he hoped all parties agree that “trade diversification is an urgent economic issue for Canada.” Some interest groups such as the Canadian AgriFood Trade Alliance were pushing for the bill to pass before the summer break.
Former Conservative trade minister Ed Fast, who had helped to negotiate the original TPP, moved to fast-track the legislation in the Commons on Thursday. But the motion would require unanimous consent and the NDP blocked it.
“I’ve talked to Minister Champagne and he’s asked, and I said we would be more than happy to work with them to find a way to get this done sooner rather than later,” said Tory trade critic Dean Allison.