Can Canada conclude a free trade deal with the EU?
06 May 2009
Today, Canada’s Prime Minister and the Czech President, this semester’s President of the EU, are expected to announce in Prague the beginning of formal Free Trade negotiations.
The Canada Europe Roundtable for Business (CERT) estimates that a bilateral agreement would increase trade and investment by up to $40 billion within seven years.
As a result of the current global economic crisis however, concluding a successful agreement will be challenging.
While many companies on both sides will support a free trade agreement, an equal number of companies and sectors will oppose the agreement.
For example, Canada presently applies a 6.1 percent tariff on the importation of foreign automobiles. Volkswagen, BMW, Mercedes and other European manufacturers will want this tariff eliminated. However, domestic car manufacturers such as GM and Ford as well as Asian car manufacturers will lobby extensively to maintain the tariff and protect their market share.
Hundreds of these examples will surface during the negotiations, including access to provincial government procurement, geographic indicators, shipbuilding, pharmaceuticals, financial services, telecommunications, agriculture and agri-food, forestry and much more.
While negotiators will do a fine job representing industry over specific tariff lines, companies should also consider the political and public environment. Managing the “politics” and the “street” can be just as important as watching what takes place in the negotiating room.
It was the lobby efforts of the domestic car manufacturers that stalled the Canada-South Korea Free Trade negotiations. And yesterday’s EU ban on seal products could be a sleeping deal breaker in the Canada-EU Trade negotiations which begin today.