Early winners and losers in ‘historic’ EU trade pact
ABOVE: What European products will flood into this country as a result of the new Canada-EU free trade agreement? Mike Le Couteur takes a look at how the deal affects Canadians.
With perhaps the exception of Canada’s poultry and egg producers, a sweeping trade pact with the EU is a potential game-changer for virtually every stakeholder across the country’s economic landscape.
When the Comprehensive Economic and Trade Agreement (CETA) takes effect, import tariffs that have kept European goods out of Canada, or made them prohibitively expensive to buy, are being torn down. And vice versa.
In a deal this vast – rivalling the long-standing free trade agreement Canada holds with the United States and Mexico, according to some – winners and losers are inevitable.
The full text of the CETA agreement wasn’t made public at Friday’s unveiling in Brussels. But Prime Minister Stephen Harper did let the Canadian public in on some of the details in a 44-page summary report.
Here are some of the early winners and losers from the deal based on the limited details provided by Ottawa:
Consumers – The elimination of a wide array of import tariffs on goods from Europe will lower prices on those items (everything from autos to wine), while putting pressure on domestic competition to do the same.
Beef and pork producers – Frustrated farmers unable to ship Canadian beef and pork to Europe under current trade restrictions will be able to ramp up exports; for Canadian beef, 50,000 tonnes a year will be allowed into the EU. For pork, 80,000 tonnes.
Big pharmaceutical firms — At the request of the EU, Canada is extending its patent-protection window on brand-name drugs by an additional two years, giving companies more time to reap the financial rewards of their exclusivity before generic makers can release competing products.
The poultry and dairy industry – With the exception of cheese producers, the dairy industry as well as poultry producers will see the ‘supply management’ system that guards Canadian prices and quotas on items like milk and eggs remain in place.
Skilled and knowledge-based workers — The new deal will pave the way for skilled workers trained in advanced fields, like engineers and architects, to be licensed to work in each jurisdiction.
Cheese makers – CETA will double the current amount of European cheese entering the Canadian market, to an estimated 30,000 tonnes. Their consolation is unfettered access to the EU dairy marketplace, but it’s unclear how much a challenge selling into Europe will be.
Provinces – One downside of the patent extension on brand name drugs is higher health-care costs for provinces who will be forced to shell out rather than buy generic alternatives. Ottawa has already signalled it is willing to compensate provincial governments.
Wineries – Wineries in B.C., southern Ontario and elsewhere will face stiffer competition from European winemakers no longer facing high import tariffs.
Canadian construction/engineering companies – Government contracts now almost automatically awarded to a Canadian firm will see heightened competition from EU firms. On the flip side, EU government contracts will become more open for bidding to Canadian firms.
CETA, which Harper called an “historic win” on Friday, also includes plenty of new changes for the country’s automotive sector, but it’s unclear yet whether it will advantage or disadvantage domestic production and jobs growth.
Labour economists suggest the pact will eliminate tens of thousands of jobs across the economy, while the Harper said this week the deal will add as many as 80,000 new positions across the jobs market.
© Shaw Media, 2013