Alberta could be heading for a major trade boost
CETA approval may double beef exports to Europe
Canadian beef farmers could see a 100-fold increase in exports to Europe thanks to a trade deal that finally gained approval from the EU parliament on Wednesday.
Canadian beef exports to Europe are currently worth between $6 million and $10 million annually and the deal would allow for exports up to $600 million.
The Comprehensive Economic and Trade Agreement (CETA), almost eight years in the making, has been a difficult process and there’s still some details to be worked out. It has to pass the Canadian Senate, which allows most of the provisions to come into effect, and then be ratified by European parliaments.
Farmers can be forgiven if they’re not celebrating in the streets just yet, considering the sheer number of roadblocks the deal has encountered so far.
“Farmers are a pragmatic bunch. They say, ‘Show me the money. I’ll believe it when I see it,’” said John Masswohl, the director of government and international relations for the Canadian Cattlemen’s Association.
He estimated about two-thirds of the new exports will come from Alberta, which has the two largest beef-packing plants in the country — in High River and in Brooks.
The trade deal will wipe out 98 per cent of the tariffs on both sides of the deal and will allow farmers to send 65,000 tonnes of beef to the EU duty-free each year.
“The key thing it does is get rid of the tariff, which is prohibitively high,” said Masswohl.
The province’s agriculture industry as a whole already exports about $300 million worth of product each year to the EU.
It’s not just the producers who benefit. When tariffs are dropped, prices fall and consumers can stretch their income a little further, said University of Calgary economist Trevor Tombe.
“It’ s the biggest deal since NA FT A. It covers about $100 billion in trade from Canada to the EU countries last year,” said Tombe.
“And that’s not counting the trade growth the deal itself would cause going forward,” he said.
Alberta’s trade with the EU is currently the lowest of any Canadian province as a percentage of GDP, but there’s potential to grow.
“The amount of trade growth with us, the U.S. and Mexico following NAFTA was enormous,” Tombe said, although the distance between Canada and Europe may stifle that growth.
With about $2 billion in beef exports going to the United States and “another pretty healthy chunk to Mexico as well,” Masswohl said the EU could start gaining on the North American market in the years to come.
“If we can get to $600 million, Europe will definitely be our No. 2 export market by value. We think the value per pound in Europe will be probably one of our highest value markets,” he said.
OTTAWA Lawmakers in Canada and Europe are hailing Wednesday’s approval of the Canada-EU free trade deal by the European Parliament as a win for the values of openness in the face of anti-trade movements, including the Donald Trump administration.
The legislature in Strasbourg, France, approved the Comprehensive Economic and Trade Agreement by a margin of 408-254, with 33 abstentions. The vote clears a major hurdle for the deal that saw its first round of bargaining almost eight years ago and has had to overcome mounting anti-trade populism in Europe.
Canada’s Parliament is also expected to ratify the deal in the coming months, which means 90 per cent of it would come into force under provisional application — a key procedural step that allows the deal to take effect without the ratification of the European Union’s 28 member countries and numerous regional governments.
Prime Minister Justin Trudeau was en route to France to deliver his own pro-trade message in an address Thursday to the European Parliament, a first for a Canadian leader, and to top business leaders a day later in Germany.
On his way into a caucus meeting earlier Wednesday, Trudeau sang the praises of the deal as evidence of the merits of globalization.
“I think it’s an illustration that when you put forward a progressive trade deal that takes into account the responsibility of governments to create good middle-class jobs, create inclusive growth — not just for a few, but for everyone — (and) that focuses on the middle class, we can move forward on globalization.”
International Trade Minister Francois-Philippe Champagne, who was already in Strasbourg ahead of the vote, called it “the right deal at the right time.”
“Good for workers, consumers and a new standard for trade.”
EU Trade Commissioner Cecilia Malmstrom took direct aim at anti-globalization forces in remarks to Parliament, in what appeared to be a thinly veiled rebuttal to Trump’s protectionist and anti-immigration policies.
“With Canada we share the democratic values of tolerance and openness. We co-operate in tackling common challenges such as migration, sustainable development, climate change and terrorism,” Malmstrom said.
CETA, as well as its companion strategic partnership agreement, would strengthen not only Canada-EU economic relations but our “geopolitical alliance ... making that partnership deeper and more powerful, reaffirming our fundamental values, political principles, and using them to shape globalization.”
The deal will help each side “serve its citizens” in the 21st century, Malmstrom added.
Former prime minister Stephen Harper, whose government opened the long negotiations that led to the agreement, welcomed the European vote with a tweet: “Pleased to finally see the Europeans ratify our CETA free-trade deal,” he wrote. “Good news for Canada and the Canadian economy.”
The Conference Board of Canada called the agreement good for both sides, since economic history demonstrates that greater free movement of goods, services and people is a catalyst for economic growth.
“Amid worries of U.S. protectionism, the opportunities CETA creates provide a shining example that international trade is not a zero-sum game,” said Craig Alexander, the board’s chief economist.
Trudeau will bolster the merits of “the progressive trade agenda” when he speaks to EU lawmakers on Thursday, Champagne said. “Canada is in a unique position to show that trade is good for people and I think we’re going to make that case across the world.”
Politicians need to do more to sell the merits to free trade to an increasingly skeptical public, but the deal will also sell itself once it is fully ratified, he added. “When people see in practice what it means for them, I would think that over time people will see the benefits.”
Critics of the deal “may be philosophically driven, just being against any trade,” he noted.
Case in point: Maude Barlow, chair of the Council of Canadians and an ardent free-trade critic, said groups such as hers would continue to oppose the deal.
“European opposition to CETA is strong and 38 national and regional parliaments still have to ratify the deal,” Barlow said in a statement. “Referendums, legal challenges, elections and other obstacles still stand in the way of implementation.”
CETA was nearly killed last October when the regional government in Belgium’s Wallonia region almost vetoed the deal.
Another anti-trade group, the Corporate Europe Observatory, called Wednesday’s vote a sad day for democracy.
“The mobilization against CETA has been one of the strongest European democracy movements ever,” the group’s trade policy campaigner Lora Verheecke said in a statement.
“A glimmer of hope now comes from the many national and regional parliaments across all of the EU that still have to ratify CETA. Each one of them can bring it to a halt.”
I think it’s an illustration that when you put forward a progressive trade deal ... we can move forward on globalization. PRIME MINISTER JUSTIN TRUDEAU