Vancouver Sun, Canada

Canada lacks EU preferential trade deal

By Don Cayo, Vancouver Sun

6 October 2009

In 2008, when Irish citizens were first asked to vote on the Lisbon Treaty, seen as a key to revitalizing the European Union by giving it more of the power now wielded by its member states, they responded with a definite No. They bought the argument that this would erode Irish sovereignty.

Yet last week, just a year and a half later, they overwhelmingly changed their minds. They endorsed the treaty by a margin of two to one.

You can find the same kind of turn-around in a sovereignty-vs.-cooperation tussle on this side of the Atlantic. Just a few years ago the provinces dug in on their protectionist procurement policies and put the kibosh on any progress toward free trade, or freer trade, between Canada and the EU. Yet now they’re on board for a much broader "comprehensive economic partnership" that, it is hoped, will cover all the usual aspects of a free trade deal plus quite a bit more.

What changed?

The economy, says Ingrid Iremark, who is serving in the dual role of the Swedish ambassador to Canada and, for the six-month term while Swedish Prime Minister Fredrik Reinfeldt serves as president of the European Council, the EU ambassador as well. Tough times can — and in this case it seems they do — motivate people to cooperate for their mutual benefit.

And the EU is, after all, the world’s largest market with 500 million people, most of them with at least as much disposable income as we Canadians.

With only six per cent of Canada’s exports now going to the EU, there remains huge room for growth. Iremark estimates that tapping more fully into the European market could mean between $12 and $15 billion in new trade opportunities for Canadian businesses.

Of course, tough times may also provoke the opposite response, as evidenced by the "Buy American" push in the U.S.

But Iremark, who has been a keen observer of Canadian-American relations during her four-plus years in Ottawa, says the resurgence of protectionist sentiment south of the border probably helped rather than harmed the free trade cause on our side of the line.

"You can see how protectionist measures are hurting small companies, big companies all over," she said in answer to my question after her presentation to several members of the consular community at a small luncheon at the Scandinavian Centre in Burnaby on Monday. "The provinces have understood how very important it is for companies to be able to bid on contracts beyond their borders, both in Europe and in your own country."

As I wrote a year ago in a column welcoming the agreement to try, once again, to strike a Canada-EU free trade deal, we are one of just eight nations in the world that doesn’t have some kind of a preferential trading arrangement with the Europeans. That’s embarrassing to a free trade supporter like me, not to mention costly for the country, which is missing out on so many opportunities.

So this may turn out to be the silver lining in the dark cloud of economic turmoil that has beset the world. As long as we can resist the impulse to hide behind protectionist barriers every time we feel threatened, it will prod us to move farther and faster into the kinds of trading arrangements where every player can win.

The first actual negotiations are to get under way this month.