The EU-Canada trade pact: some key questions

Every trade agreement produces winners and losers and the free-trade deal between the EU and Canada, still pending ratification, is no exception.

The deal is just one example of controversy ignited by trade talks.

Others are the North American Free Trade Agreement (NAFTA) which Donald Trump wants to renegotiate, the Trans-Pacific Partnership (TPP) which he has threatened to scrap, and the US-EU TTIP pact which is now out favour on both sides of the Atlantic.

Here we illustrate the controversies by looking in more detail at the EU-Canada deal, the Comprehensive Economic and Trade Agreement (CETA).

Signed in October, the landmark pact which will affect more than 500 million people has sparked a wave of debate in Europe, particularly in France.

But the jury is still out on whether it will herald a new era for specialist local producers or simply open the doors to a flood of hormone-treated, genetically modified ‘junk’ food.

– Who will benefit? –

CETA will remove 99 percent of customs duties between the two sides, in a big win for European exporters, who will have easier access to the north American market.

But European businesses who are more reliant on internal markets are likely to be vulnerable to competition from Canadian firms.

Such is the law of free trade, says Radu Vranceanu, professor of economics at France’s ESSEC business school. “A large number of jobs exist in France thanks to exports and commercial trade,” he told AFP.

Thomas Guenole, a political scientist at Sciences-Po in Paris, believes the benefits will be skewed towards big business. “CETA will increase the margins of large, globalised firms. They will be the winners,” he told AFP.

“The working class and white collar professionals will lose out.”

Karine Jacquemart of European consumer rights watchdog Foodwatch agrees the biggest winners will be “companies who have access to the public sector, above all multinationals who will benefit from special rights, and particularly from access to the arbitration mechanism in commercial conflicts.”

– How will it affect local producers? –

Matthias Fekl, France’s minister of state for trade, has said the pact will recognise another 42 French geographical indications which will be able to freely enter the Canadian market and will also help pork and dairy products.

But his argument was dismissed as “ridiculous” by Dominique Plihon of the anti-globalisation group Attac who said that specialist French products, which were locally-produced on a small scale, would not benefit from the pact.

“On the contrary, it will make it easier to bring junk food into Europe, such as hormone-treated meat and GM products,” he warned.

– Who is most worried? –

French farmers have repeatedly expressed concerns over competition from Canadian imports, with the beef industry particularly concerned.

Emmanuel Aze of the Confederation Paysanne farmers’ union said the granting of additional quotas to Canadian beef and pork as well as removing customs duties would “aggravate the collapse of these industries in the EU as well as the headlong rush towards industrialised agriculture.”

By contrast, Canadian food processing manufacturers are almost unanimous about the positive benefits of the huge trade deal.

– Who else stands to benefit? –

There are some concerns the agreement could be used as a “Trojan horse” giving a backdoor to US firms looking to enter Europe as negotiations for a controversial US-EU free trade deal falter.

The pact provides a “gateway (to Europe) for American multinationals,” Plihon warned.

But Fekl has dismissed such concerns out of hand. “Nearly 3,000 American business are already operating in France with half a million jobs created so they don’t need CETA,” he said.

– And what of democracy? –

Jacquemart points out that the so-called precautionary principle, under which authorities can adopt restrictions to counter potential risks to public health or the environment, was not mentioned “even once in the treaty”.

“When nothing guarantees this principle, European legislators, citizens and consumers lose out,” she told AFP, referring to a measure widely used across Europe to justify bans on hormone-treated beef and the cultivation of GM crops.

“The winners are big multinationals and those who have no interest in making decisions on the basis of the principle of precaution.”

But Fekl denies the agreement has implications for democracy.

“Canada is the first country to accept the French and European proposal for an international investment court” to hear disputes, he said.

“If we want to protect our local produce and our agriculture… it is also through these international negotiations.”