At war with himself

PM’S TAX ARRANGEMENTS HARDLY DIFFER FROM WHAT MORNEAU IS TARGETING.

Today,t he longawaited Canada-EU Comprehensive Economic and Trade Agreement ( CETA) comes into force. It took the Government of Canada and the European Commission seven years to negotiate and a further year to ratify.

Plagued by delays, the real question is not why CETA has taken so long, but how it has survived.

CETA has passed every test to date. It has managed to survive a populist insurgency that sees left and right making common cause in their opposition to international trade agreements.

CETA has democratic legitimacy. It passed unanimously last year in the European Council, the body for the elected heads of all EU countries. It received 60 per cent of the vote in the fractious European Parliament. It easily made it through the Canadian Parliament and has been endorsed by all provinces and territories.

CETA is by far the most comprehensive bilateral agreement signed to date by either Canada or the EU. It is projected to boost Canadian exports by more than $ 8 billion a year into the 500- million- person European single market — significantly more than is projected for a future Canada- China FTA. It provides a modern architecture for the more than $ 100 billion in goods and services that are traded annually and a stock of foreign direct investment in excess of a half- trillion dollars.

CETA will further open markets by removing almost all tariffs and reducing red tape for goods and services that are traded between Canada and the EU. It will deliver greater transparency and ensure competition on bidding for public contracts. It strikes a balance between the rights of i nnovators and end users and contains provisions that enshrine environmental norms and workers’ rights.

An agreement as ambitious as CETA has not been without its controversies. Negotiations require tradeoffs but what matters is that there be significantly more winners than losers. Ambitious trade agreements like CETA can only happen if this is the case.

There are many sectors that will immediately benefit from CETA: 98 per cent of tariff lines covering almost all export industries will disappear. Conformityassessment provisions ensure that products tested in Canada or the EU will now be automatically recognized in the other market, reducing compliance costs and easing the movement of goods at the border.

Canadian provinces and territories participated directly in CETA negotiations, and in so doing made significant “behind the border” commitments, including to further open government contracts to European bidders. This will create opportunities for European firms in Canada and in return, Canadian firms will now have unfettered access to the $ 5 trillion EU procurement market, the world’s largest.

CETA will make it easier for companies to move their skilled workers back and forth across the Atlantic. New opportunities for contractors and technical specialists to work in Canada and the EU are an important feature of the agreement.

Comprehensive provisions for trade in services ensures that the services of today and tomorrow will be covered by CETA. This is vitally important given that services represent over 75 per cent of economic activity in Canada and the EU.

Due to CETA’s “mixed competency” between the EC and member states, foreign direct investment provisions will not be set out immediately. In the meantime, existing foreign investment promotion and protection agreements (“FIPAs”) between Canada and several European states will remain in force.

Fears t hat CETA will undermine national sovereignty are mis placed. Rather than being isolated and in tension with other countries, Canada prefers collaboration with likeminded countries through fair, rules- based arrangements. Deepening economic ties with Europe has always been popular in Canada. It is now the more so given the challenge of renegotiating NAFTA. In fact, several of CETA’s provisions are being tabled as Canadian priorities in the NAFTA talks.

CETA provides the template for what is possible in a bilateral treaty. With CETA, Canada and the EU are entering a new and exciting phase in their relationship.

CANADIAN FIRMS WILL NOW HAVE UNFETTERED ACCESS TO THE $5-TRILLION EU PROCUREMENT MARKET.