Free Trade across the Puddle
by Nicole Halseth
Following in the footsteps of numerous similar initiatives around the world, Canada and the EU have signed a free-trade deal that has been in the works for some time now. The purpose of the agreement is to bolster growth and employment within both areas.
At a recent meeting in Brussels, Prime Minister Harper and European Commission President, Jose Manuel Barroso, put together the agreement. According to an article on the BBC website, Mr. Barroso claims the deal represents a “breakthrough in negotiations” to achieve “a great agreement for both the European Union and Canada.”
However, before the agreement is actually put into place, it must still be ratified by the parliaments of each EU member state. As such, it may be some time before citizens on either side of the Atlantic start to feel any effects.
Once it is approved, the deal is set to make investing and selling between companies in both Canada and any of the EU’s 28 member states much easier than it has been in the past. It will do this by reportedly lowering tariffs, streamlining regulation, and decreasing red tape. From an economical and political standpoint, this move is likely to be beneficial. The EU is Canada’s largest trading partner behind the United States, putting it at our second largest trading partner in total.
According to the article, Prime Minister Harper claimed that the agreement is “the biggest (trade) deal our country has ever made.” It will reportedly open Canada to an aggregate market potential of 500 million people in the EU. This is a landmark value, as it makes this new agreement bigger than the North American Free Trade Agreement (NAFTA) signed with the US and Mexico.
It will also reportedly greatly benefit the EU economy. According to the European Commission, the deal is expected to increase annual bilateral trade in goods and services around a fifth of what it is currently, to 25.7billion euros ($35billion; £21.7billion).
This new agreement with Canada is part of a larger initiative spearheaded by the European Commission to negotiate trade agreements with over 80 countries around the world, on behalf of its member states. This comes after the collapse of the last major round of global trade talks in Doha.
Though this free-trade deal may benefit Canada and the EU economically and politically, free-trade deals around the world have been controversial since their origin. Certainly, the North American Free Trade Agreement has spurred countless rounds of debate and disagreement since it was created in January of 1994. Much of this disagreement comes from the effects of free-trade on the citizens of each country involved. Though it may be a positive move politically and economically, the social effects of such a move are difficult to measure and may not always be positive.
Though it may not impact you directly, the ripple effect of free-trade in all its forms disseminates throughout the country in the prices and availability of goods, among other things. In the next decade, this new free-trade deal may become increasingly significant.