Some Canadian ag groups hopeful that the Comprehensive Economic and Trade Agreement can still be salvaged
The Canada-European Union free-trade deal is twisting in the wind, and analysts aren’t sure if it will survive.
However, Canada’s export-oriented agriculture industries are hoping the threatened deal can somehow still come into force.
“We’re hoping cooler heads will figure this out,” said Andrew Dickson, general manager of the Manitoba Pork Council. “It’s a high-value market, so the potential for reasonable profits was pretty good.”
Exports of pork, beef, crops and processed food all stood to gain from the deal with tariff-free limits being raised for some and free access offered for others.Â
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The biggest gain for many exporters and farmers was the de-politicization of technical disputes once the deal came into force.
European politicians can now get involved in reviews and regulatory actions, which can effectively shut down trade. However, the free- trade deal would see issues dealt with first by regulatory authorities.
The deal wasn’t embraced by all sectors of the Canadian industry. Dairy farmers were worried by a deal that would boost quotas for European cheese allowed tariff-free into Canada.
The deal might never be approved.
Leaders of a regional parliament in Belgium said Oct. 24 they couldn’t give it their consent, which the Belgian government has said it requires before it will consider approving the deal. All 28 members of the EU need to approve the deal order for it to become law, the EU has said.
However, Oct. 24 wasn’t a drop-dead deadline. The deal remains alive, but approval isn’t likely to happen before a planned trip by Prime Minister Justin Trudeau to Brussels on Oct. 27 to celebrate its basic approval. That trip might not occur.
European credibility would take a hit if the Canada deal fails because no other deal is likely to be as inoffensive to European consumers and interests.
“If the Europeans can’t do something with Canada, that’s one of them in a sense … how are they ever going to negotiate something with anybody else,” Dickson said.
Economist Al Mussell of Agri Food Economic Systems in Guelph, Ont., thought the same.
“If this thing splutters … who is going to dare to partner with the EU?” he said.
Mussell said anti-trade sentiment has been growing around the world, making the outlook dire for other deals, too.
“You have to think that (the Trans- Pacific Partnership) is a bit of a long shot at this point,” he said.
Dalhousie University food industry economist Sylvain Charlebois looked at the Canada-EU mess and took the approach of “when one door closes, another door opens.”
“While Canada was signing a deal to benefit itself, Europe went along with the intent of not jeopardizing its reputation around the world,” he wrote in a commentary.
“If that doesn’t work, the U.K. may be a decent consolation prize from an agricultural trade perspective.”
Other analysts have also noted that a United Kingdom no longer part of the EU might be easier to get a trade deal with than the EU, or almost anywhere else. Canadian trade with the U.K. is almost as important as its trade with the other 27 members of the EU.
The U.K. is also more supportive of trade than most of the rest of the EU, and has been seen as the driving force behind the Canada-EU deal. If the EU deal fails, it might be time to start working on a bilateral deal.
“I think that’s one of the things you’d do immediately,” said Mussell.
“Could we make this work for the U.K.? A lot of our existing trade with the EU is with the U.K.”
Dickson joked that Canada needs to launch a “Bacon for Britain” program to reclaim some of the market Canada has lost to EU competitors such as Denmark.Â
“Canada used to be a major supplier of pork products, particularly bacon, in the 1950s, into Britain,” he said.
