Is CETA A Sign Of Diversified Canadian Economic Dependence?

Is CETA A Sign Of Diversified Canadian Economic Dependence?

On Wednesday February 15th, the European Parliament in Strasbourg voted to ratify the Comprehensive Economic and Trade Agreement (CETA). The deal moves to create a free trade zone between Canada and the European Union, eliminating trade tariffs, allowing foreign corporations to compete for contracts in member states, and in the long term moves to unify labour and environmental standards on both sides of the Atlantic.

The deal has been celebrated in both Canada and Europe, with Canadian International Trade Minister Francois-Phillippe Champagne emphasizing the improvements for consumers calling CETA a “deal for the people.” Speaking in Strasbourg Wednesday morning MEP Artis Pabriks, the Latvian spokesman for CETA, said, “By adopting CETA, we chose openness, and growth and high standards over protectionism and stagnation.” (via CBC)

Although the European Parliament passed the deal with 58% of the vote, there has been a vocal criticism of the deal throughout Europe that seems unlikely to abate anytime soon. Most critics have concerns over the investor-state dispute settlement aspect of the agreement, which would allow corporations to sue governments over policies which would jeopardize their profits in future. This has also lead to concerns that the deal will call food safety standards into question and threaten the sovereignty of states to make trade laws which contradict those outlined in CETA. On the European end of the deal, there is also concern that it will provide a backdoor for U.S. Corporations to enter the Eurozone tax-free, as the deal extends to American companies with offices in Canada.

EU Commissioner of Trade Cecelia Malmstrom has brushed off these concerns, saying that approving the deal “will not change food safety standards or any other EU requirements, only the EU institutions can do that.” Provided she’s right, there does seem to be the potential for the agreement to strengthen both European and Canadian economies. Currently, €60 billion ($64 billion) worth of trade flows between Canada and Europe annually, and the agreement is set to increase that number by 20% in its first year.

While the economic ramifications of the deal are significant, the shift in foreign relations between Canada and the United States is making waves.

It is no secret that the politics of the Canadian Prime Minister and American President are very different. Trudeau was elected on a platform of inclusion, liberal social policy and increased public service for Canadians – ideologically he could not be more different than Trump. And, in the wake of the Trump-Trudeau Handshake Fiasco, much has been made of Canada’s alienation from America. More than half a trillion dollars in trade flows between the two nations annually, but with Trump threatening NAFTA and withdrawing from the TPP (an agreement which Canada is still very much a part of), there is a growing desire among Canadians to diversify.

Almost 70% of Canada’s trade economy is with the U.S., and that level of dependence has caused concern among Canadians who oppose Trump’s presidency and ideology. Let’s not forget here that Canada is among the nations that pledged to continue to accept refugees in the wake of the Travel Ban, and that this manifested in a moment of international awkwardness during the meeting of the two leaders last week. Trudeau spoke about Canada accepting more than 40,000 Syrian refugees last year by saying, “there have been times where we have differed in our approaches and that's always been done firmly and respectfully."

Though the statement was diplomatic, the tone is pretty clear – Canada and the United States no longer agree on key issues. This explains why at a time when America is moving towards protectionism, Canada is moving towards Europe and the Pacific.

This tone was echoed by Artis Pabriks who said, “Together we can build bridges, instead of a wall, for the prosperity of our citizens. CETA will be a lighthouse for future trade deals all over the world.” The jab at Trump and the new direction of America is undisguised, the disdain all but explicit. The hope that more nations will band together without the United States is clear. This is what the end of American dominance in international affairs looks like.

This should cause the new administration some pause. America’s closest ally is moving away from them economically, their allies in Europe are making statements which equate a trade deal with some sort of ideological victory for them. While I don’t think this trade deal is in practice going to weaken the relationship between Canada and the U.S. (and if the critics are to be believed it will only intensify American corporate involvement in Europe), the conflict of ideas is clear. There is now a growing consensus among Western nations that the rhetoric of the Presidency is something that they will resist. By proxy, this is a move to limit American hegemony around the world.

I for one am thrilled – deals like this represent the U.S. taking a step back in international affairs, limiting their involvement around the world. I just wonder whether this is what the government or the people who voted for it had in mind.