EU trade deal could affect water, First Nations, fishing
Embassy Magazine | September 29, 2010
EU trade deal could affect water, First Nations, fishing
By Anca Gurzu
Acomprehensive free trade agreement between Canada and the EU could lead to increased greenhouse gas emissions from the oil sands, changes to water management and consumption, and disruptions to First Nations’ way of life, according to a European Commission report.
The result, say experts, could present a communications problem for both sides given widespread environmental concerns as well as sensitivities over water ownership and even fishing and culture.
The report, released at the end of August, is the first out of a three-part process of the Canada-EU trade sustainability impact assessment. It studies how the proposed Comprehensive Economic Trade Agreement will impact not only the traditional economic pillars, but also the non-trade ones, such as the social, environmental and development dimensions in the 27-member bloc and its trading partner, as well as relevant third countries.
The EU has been undertaking assessments for all its major trade negotiations since 1999. Funded by the European Commission, but conducted by a contractor, the Canada-EU impact assessment uses both statistical and quantitative analyses as well as consultations with NGOs, businesses and other relevant players. The interim and final report, which are expected to study these issue more in depth and to give policy recommendations, are expected later this year.
The report raises the spectre of increased European investment in the oil sands despite concerns within the bloc about their environmental impact.
"Where the CETA contributes to greater extraction and investment in the tar sands, it is likely that Canada’s emissions of greenhouse gases will increase," notes the report,
It also touches on the controversial topic of public markets, especially water utilities, which may be opened through the agreement.
"Canada-EU trade could allow deeper penetration of EU-based water utilities in Canada," the report states. "This could lead to changes in water management and water consumption. Public control and management of water resources is a sensitive issue in Canada and it is likely that despite potential environmental benefits, stakeholder concerns will focus on public ownership and the risk of higher cost of water and its impact on low-income families."
In the social issues section, the report notes that Canada’s Aboriginal communities are vulnerable to northern industrial, mining, energy and forestry development, which encroach on traditional lands subject to unsettled land claims.
Projecting the trade deal’s impact, the report states: "While development can bring jobs and increased revenues, it can also disrupt traditional cultures and affect population health through water, air and soil contamination."
It also highlights that Canada-EU trade liberalization may encounter serious opposition in the area of culture, which has been under a strong framework of protectionism, especially in Quebec.
There are also concerns that the CETA may lead to over-fishing in certain parts of the Atlantic, although increased Canada-EU collaboration could also provide greater impetus for the development of more sustainable fishery practices.
Similarly, the report touches on Canada’s transportation sector, which is witnessing a large growth in emissions. The trade deal could lead to a further increase in certain metal transformation sectors, but the report also points out that "the penetration of European clean-techs in Canada could generate environmental benefits."
Economic benefits re-affirmed
The potential environmental impacts came as no surprise to Dan Ciuriak, former deputy chief economist at the International Trade department.
"The reality is that economic growth tends to use up more energy," Mr. Ciuriak said. "By increasing growth, you will have to explain why you have undertaken a policy that increases greenhouse gas emissions as well. That is a communications problem for governments, no question about it."
The reason behind this, he said, is because governments do not want to deal with negative numbers and do not want to be second-guessed.
"If it’s going to have a negative impact on the environment, it’s problematic to deal with this in a world of sound bites, where you don’t have time to give a balanced statement on issues," Mr. Ciuriak said.
Stuart Trew, trade campaigner with the Council of Canadians, a civil society group that has been a vocal critic of the Canada-EU trade talks, said he is not sure how the impact assessment’s findings will affect the final deal. However, he said it is interesting that this initial report is already outlining some of the environmental and development impacts the pact might have.
"When you have the European Union already recognizing that this is what trade agreements do," Mr. Trew said, "that’s quite remarkable and should have Canadians scratching their heads about the extent of the policy changes that the CETA will bring in Canada."
But Mr. Trew said he is concerned that the assessment might not offer a deep enough picture.
"I think that the environmental impact will be much higher than what [the impact assessment] will imply," he said.
As previously projected in a jointed study Canada and the EU released in 2008, the trade deal’s economic impacts are expected to be mostly positive.
The study highlighted existing barriers to the flow of goods, services and capital between the two sides, and the potential costs and benefits from removing such barriers. It found that liberalized trade, especially for services, could boost Canadian gross domestic product by up to $12 billion annually.
The report notes that if overall GDP increases, social benefits will also increase as the number of available jobs will grow, "though it is likely that there will invariably be a number of sectors which see job losses as workers transfer from less competitive sectors to those that are more competitive."
The trade deal would also bring major gains in foreign direct investment on the Canadian side, especially in the coal and oil sectors, which were previously also identified as a source of greenhouse gas emissions. The report also touches on trade agreement’s impact on other sectors, such as pharmaceuticals, forestry, chemicals, electronic product manufacturing, automotive.
agurzu@embassymag.ca
