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Monday, October 20, 2008

Trade with Europe

The Wall Street Journal has picked up a story that I haven't noticed elsewhere.  Canada and the European Union are beginning free trade negotiations.  This startled me at first.  The whole original point of the EU is that it is an exclusive economic club.  The fact that they are willing to open it up to Canada proves that it has gone beyond its purely economic significance.

The EU, I believe, is our third biggest trading partner.  First of course is the United States at something like 80% of our trade.  Then Japan, who buys our steaks and wood.  Finally comes Europe as a distant third, yet they are hoping to raise this trade 22.9% by 2014.

For six decades Canadian foreign policy has been trying to expand trade beyond the United States in a significant way.  Of course it has always failed.  Why would business spend so much money transporting over oceans when they have the world's greatest market at their door steps?

It has long been a Liberal dream to ignore this common sense and push business into the arms of Europe and Asia.  It is interesting than that it is Harper that has done more for this cause than any other Prime Minister.  Has Harper become the champion of the third way? (the first way is exclusive trade with the British Empire, and the second way is exclusive trade with the United States.  The third way is suppose to be a more diverse trade.)

Posted by Hugh MacIntyre on October 20, 2008 in International Affairs | Permalink


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The Tories have been moving on European trade for a while. Earlier this year they negotiated free trade with the European Economic Area. The EEA are those wealthy countries that are in Europe but not part of the EU (Iceland, Switzerland, and Norway).

While the Canada-EU trade pact could include a lot of onerous things like preposterous labeling rules - it will also include some really interesting things like an expansive labour mobility agreement.

Already the Tories have been creating ad hoc labour mobility agreements with countries like Poland, Latvia, and the Czech Republic. What we would see under a Canada-EU pact could be an almost totally free movement of labour between the super state and us.

This is something that is going to happen - we have Sarkozy on board, and the Czechs have come out to say that they support negotiations as well. That's important because France has the presidency of the EU now, and the Czechs will hold it after them. This gives us a 1 year window to get the fundamentals down.

Which is alarming in a way because this thing could effect immigration policy, foreign policy, agriculture, and of course our relationship with America.

Personally, I'm ambivalent. I see the money to be made off this, but then there's also the risk of rushing into something quite serious without enough debate or thought.

Posted by: Robert Jago | 2008-10-20 12:27:49 PM

I appreciate your reasoning Mr. Jago.

Posted by: Marc | 2008-10-20 12:51:08 PM

Free Trade allows both parties to prosper and seek the most efficiencies in their economy.

I don't see how removing the obstructions to the movement of goods and services in and out of Europe can be percieved in any way as a negative?

Trade negotiations with the USA are not always rosy, why should we avoid other potential markets?

Posted by: Q | 2008-10-20 1:16:04 PM

Robert, good points. But why ambivalent? Free trade should be... free! Agreements do not describe the free part, only the restricted part. Free trade increases wealth for both trading parties. Why would we want to debate that?

Q, agreed.

Posted by: TM | 2008-10-20 2:49:15 PM

Free movement of goods and services is a good thing and worth pursuing. Free movement of workers is problamatic- especially with our charter of rights. Just ask France. They must be licking their chops at the prospect of shipping out some of their problem people.

Posted by: DML | 2008-10-21 12:12:26 AM

One would think this would be discussed in Parliament? Or is this another approach to the New World Order under another name? The EU has one currency, and is more or less a dictatorship. And there was plans for a North American Union (NAU) or SPP, with one currency. There are other ways to skin a cat, perhaps this EU "free trade" is the way of the internationalists getting their agenda through. A world controlled by those who know best? Meanwhile the "serfs" won't get to vote on it!

Posted by: Stephen J. Gray | 2008-10-21 8:19:02 AM

Here's what I mean by saying I'm ambivalent:

If this were Korea or Japan we were talking about, no big deal. But this is the European Union. There's baggage involved. We need to make sure our markets are open for European businesses but closed to European regulations or the Brussels Eurocrats.

Posted by: Robert Jago | 2008-10-21 10:51:30 AM

Robert, I hadn't thought of that. Good point. I would not want more regulation creeping in from the EU.

However, a country can allow free trade, even if a trading partner does not. Let Canadians sell whatever they can to Europe. And let Canadians import whatever they want from Europe. Some Canadian products won't make it to Europe because of crazy regulations. That hurst them more than us. Wealth is what you can buy, not sell.

And let them dump whatever they want in Canada, even if it is below their costs. They lose there too, and we will thank them for the gift.

Posted by: TM | 2008-10-21 10:34:16 PM

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