Some say the Canada-EU trade agreement signed in 2013 is Stephen Harper’s panacea as Prime Minister even if many details have yet to be made public. Parliament had a brief overview but still has yet to see anything in ink. When considering how complicated multilateral trade negotiations can be, we need to give credit where credit is due: a pact-in-principle with the EU is quite the accomplishment.
Nonetheless, those who elevate the agreement to the status of historical treaties are only reminiscing about the 90s and the forging of the North American Free Trade Agreement. The world is a much different place now. This agreement, if ratified, will only allow Canada to join the ranks of countries which are unconditionally committed to free trade – nothing more. In other words, with this agreement, Canada has shown for the very first time that it is willing to make some significant compromises on trade restrictions involving agricultural trades, a highly contentious issue in global commerce. It’s a statement that has not gone unnoticed, and the agreement with the EU couldn’t have come at a better time.
As American government has become increasingly dysfunctional over the last few years, the world is considering options for reliable economic leadership. Canada and the EU, amongst other players, are questioning the current global monetary regime led by the Americans. As a result, the fact that Canada crafted and signed an agreement with the EU before the Americans is not trivial. For one, the Canada-EU deal will likely be used as a benchmark instead of just an afterthought.
To be realistic though, since it may take up to two years for the agreement to be officially ratified, negotiations with the Americans may influence or even alter the content of the Canada-EU agreement, yet even this attests to the significance of our pathbreaking work. Secondly, both the Americans and the EU have shown an interest in each other but have a toxic history of political relations, mainly stemming from disagreements regarding the proper response to international conflicts. It is highly unlikely that a deal can be signed between the two parties by the end of President Obama’s second term. So for Canada, to have secured an agreement with the EU brings a better sense of certainty.
For Canadian agriculture, this agreement is seminal, full stop. Over the last few years, Canada has signed trade agreements which lacked in scope. Free trade agreements with Colombia, Panama, or Peru aren’t necessarily earth-shattering when the world is more concerned about what goes on in India or China. This newest potential trade arrangement can significantly support some of our major agricultural sectors like cattle and pork. Particularly in light of the Country of Origin Labelling rules in the U.S. which are becoming increasingly unbending, our livestock industry needs better access to global markets. Even though it may take a while before the deal is enacted, it provides some of our lagging sectors with a renewed sense of hope. Canadian agribusinesses need to prepare and be ready for this new reality. Training and innovation are definite priorities in light of these looming changes. Better expertise in environmental stewardship is also key for our country and partners abroad.
With the St-Lawrence seaway which provides a very economical way to move products Eastwards to Europe, Ontario and Quebec are likely to gain from this new partnership. The food processing sector in Eastern Canada which has been facing major macroeconomic headwinds of late will likely embrace this opportunity in the future. And for that, this agreement, once ratified, is a step in the right direction for our agricultural economy, but this should only be considered as the beginning of a renewed commitment to free trade.