Since announcing the Comprehensive Economic and Trade Agreement (CETA) three weeks ago, Stephen Harper’s Conservatives have repeatedly labelled those questioning the deal as “anti-trade.” But this Canada-European Union accord is one part trade and four parts corporate bill of rights.
While the government has promoted the part of the agreement that would eliminate 98 per cent of all tariffs, this masks the fact that these are already low (or non-existent) on most goods traded between Canada and the EU. A Royal Bank report released last week notes that mining, oil and gas products represent 45 per cent of Canada’s exports to the EU and most of these materials already enter the EU duty free.
On combined bilateral trade of $85 billion a year, EU exporters currently pay $670 million in tariffs while Canadian producers pay only $225 million in duties. To put this sum into perspective, eliminating all current Canada-EU tariff payments will barely cover the increased drug costs caused by another part of the agreement. The extension of Canadian patents under CETA is expected to drive up already high pharmaceutical drug costs in this country by between $850 million and $1.65 billion a year, according to a Canadian Centre for Policy Alternatives study. In other words, Harper’s Conservatives are proposing to add a billion dollars or more to the cost of our health care system, in return for a cut of less than $900 million in tariffs, most of which will benefit European producers. Is this really a good deal for ordinary Canadians?
And, one might ask, what does extending patents have to do with free trade? In fact, as a type of monopoly, patents stifle competition, which is supposed to be a pillar of free trade ideology. Of course the powerful brand-name drugmakers pushing the patent extension are more interested in increasing their profits than economic theory.
Another part of CETA that has little to do with expanding free trade is the investor state dispute settlement process. Modelled after the North American Free Trade Agreement’s Chapter 11, this aspect of the accord will give corporations based in Canada and the EU the ability to bypass domestic courts and sue governments for pursuing policies that interfere with their profit making. The Conservatives pushed for an investor state dispute process in CETA even though there’s been a growing international backlash to these type of accords and under NAFTA’s investor dispute process Canada currently faces more than $2 billion in lawsuits.
A number of other CETA provisions also strengthen investors’ rights to the detriment of democracy. For example, the agreement gives multinational corporations unprecedented rights to bid on public contracts. This will weaken provincial and municipal agencies ability to buy local and pursue other environmental and socially minded policies.
Concurrently, the accord makes it more difficult to set up new publicly operated social services. For instance, a municipality unhappy with private water delivery could face a suit if they tried to remunicipalize (or de-privatize) this service.
CETA also locks in reforms to the Telecommunications Act buried in last year’s 450-page omnibus budget. The Conservatives’ changes allow foreign-controlled corporations to buy a majority stake in telecommunications companies holding up to 10 per cent of the Canadian market (and then grow without limit from there). Under the banner of “free trade,” CETA will make it extremely difficult for a future Canadian government to reverse recent reforms to the Telecommunications Act. This is just one more example of the Conservatives sneaking through their ideological agenda without proper, transparent debate in Parliament.
Recently International Trade Minister Ed Fast told the House of Commons that “the NDP remains beholden, both financially and organizationally, to the big union bosses and anti-trade activist groups.” For his part, Harper told the press that “ideological opposition to free trade in Canada is really, today, part of a very small part of the political spectrum – a very small and extreme part – and for that reason I think you will find very few Canadians who are opposed in principle to having a free-trade agreement with Europe.”
Yes, few Canadians oppose trade with Europe “in principle,” but CETA is only partly about trade. The deal mostly benefits multinational corporations and it isn’t “anti-trade” to say so.