With its trade deal with the U.S. under stress, the Canadian negotiation team need to up their game and bring home CETA for the good of their economy. A free trade deal with the EU will see an almost 20% jump in trade ties.
It is in Canada’s strategic interest, as it tries to minimise its dependence on the United States, to see that free trade talks are a success. Failure to do so will weaken its strategic purpose and complicate negotiations with others, including India and China.
The hopes of signing the free trade pact appears to be diminishing with the Belgian government failing to win the consent of regional authorities, a key component that’s required to get the deal through.
The deal will provide Canada with preferential access to a market of 500 million people, which is more than the one covered by the North American Free Trade Agreement (NAFTA).
“We are one of the most dependent countries in the world in regards to trade,” said Jean Charest, the former Premier of Quebec. It is he who initiated negotiations for the EU deal during his tenure. “If this agreement fails, it will be a disappointment”.
With Canada sending 75% of all its exports to the United States and since NAFTA is being stressed, the country’s exports could be significantly affected. Over dependency, for exports, on the United States have made NAFTA a poll issue.
If Canadian Prime Minister Justin Trudeau manages to scrape through the Comprehensive Economic and Trade Agreement (CETA) deal with the EU, it would essentially extend a lifeline to Canada’s exports and its economy.
It is critical that Canadian officials push hard to try to overcome hurdles to CETA with various European States.
Interestingly, increased globalisation has arisen to be one of the main challenges to the EU-Canada deal, which means both parties will have to sit for longer during negotiations to iron out the burrs, said Michael Hart, a trade policy professor at Carleton University.
However, a source close to the negotiations have disclosed that Ottawa is likely to struggle to pick up the pace of the talks.
Similarly discussions with India & China too are moving slowly with no guarantee of an outcome in the near future, said two sources. It appears that dispute settlement mechanisms are the one holding up the negotiations.
As per opinion polls, Canadians oppose the very idea of a deal with China, which according to insiders, is at least a decade away.
When asked whether Canada would redouble her efforts with India and China if the European deal does not take off, Chrystia Freeland, Canada’s Minister of Trade said she would give her “absolute and relentless focus” this week on CETA.
Officials close to the negotiations say, one of the benefits of CETA is bilateral trade will see a jump of 20%. Furthermore, with NAFTA under duress, it would be beneficial for U.S. companies who are located close to the U.S. border to shift their operations to Canada in order to tap the massive European market, said the executive director of the Canada-Europe Roundtable for Business trade lobby.
In relation to CETA, he went on to add, “This is the last hope.”