Canada’s closing in on trade deal with Europe

[pampango]

http://news.guelphmercury.com/News/article/756507

Canada and the European Union recently completed their sixth round of negotiations on a Comprehensive Economic and Trade Agreement (CETA). While there have been some delays, both sides expect a deal can be finalized in 2011. The CETA is the most comprehensive trade agreement Canada has ever negotiated. So why is this the deal most of us have never heard of?

For those opposed to Canada’s last big negotiation, the free trade agreement with the U.S., and the subsequent North American Free Trade Agreement (NAFTA), the core concern was the belief that the country’s sovereignty would be eroded as a result of the agreement. Since signing the free trade agreement, bilateral trade between Canada and the U.S. has quadrupled and Canada appears no closer to becoming the 51st state than it did in 1988.

The U.S. shut out Canadian goods with its Buy America provisions, which were overturned only once Canadian provinces signed a general procurement agreement. Canada can’t have it both ways – if it closes its markets to trading partners, they will reciprocate. An export driven economy with a small internal market like Canada is greatly affected when protectionism occurs.

One of the more interesting aspects of the current economic crisis is the absence of any dramatic increase in protectionism. The principal reason why this has not happened – and why trade liberalization continues – is the recognition by countries that shutting out trading partners can mean shutting down a country’s main industries.