Canada to see some gains from trade deal with EU

The Hamilton Spectator - - CANADA & WORLD - ANDY BLATCHFORD

OTTAWA — Canada’s free-trade pact with Europe is poised to pro­duce “mod­est” eco­nomic gains that work out to an av­er­age an­nual in­come boost of $220 per Cana­dian, the fed­eral bud­get watch­dog says in a new re­port.

The par­lia­men­tary bud­get of­fi­cer re­leased a study Tues­day that es­ti­mates the trade deal would have lifted Canada’s over­all eco­nomic out­put in 2015 by 0.4 per cent or $7.9 bil­lion, had it been im­ple­mented at the time.

Cana­dian ex­ports of goods to the EU would have in­creased $4 bil­lion, ser­vices would have been up $2.2 bil­lion and in­vest­ment would have grown by $3.1 bil­lion, the analysis found.

But the re­port did put the over­all pro­jected im­prove­ment into per­spec­tive by not­ing that Canada boasts a $2-tril­lion econ­omy.

“CETA will lead to some gains for Canada, but they will be mod­est,” the re­port said, re­fer­ring to the deal’s full name: the Com­pre­hen­sive Eco­nomic and Trade Agree­ment.

“The work out­lined in this re­port projects a small, but pos­i­tive, over­all ef­fect on Canada’s econ­omy ... Start­ing from rel­a­tively low lev­els, ex­ports of goods will in­crease by 9.3 per cent and ser­vices by 14 per cent.”

The PBO based its analysis on 2015 be­cause pro­ject­ing into the fu­ture would have been more dif­fi­cult. It was also the most re­cent year for which a com­plete set of eco­nomic data was avail­able.

The bud­get of­fice pre­dicted some Cana­dian sec­tors will likely see slower growth un­der the agree­ment, in­clud­ing some dairy and agri­cul­tural prod­ucts, tex­tiles and some ma­chin­ery and man­u­fac­tured goods.

On the other hand, the re­port pre­dicts sec­tors in­clud­ing trans­port and mo­tor ve­hi­cles, some met­als and wheat will likely grow more quickly. The re­port fo­cused on the parts of the agree­ment that it said could be stud­ied an­a­lyt­i­cally.

The ar­eas an­a­lyzed in­cluded tar­iff re­duc­tions on goods, re­duc­tion in trade bar­ri­ers for ser­vices and in­tel­lec­tual prop­erty as it re­lates to roy­alty pay­ments for patented drugs. The re­port also ex­am­ined the over­all im­pact that the deal might have on Canada’s gross do­mes­tic prod­uct through in­vest­ment.

Last year, Canada ex­ported about $39.8 bil­lion worth of mer­chan­dise to the EU.

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