Why the EU-Canada deal needs to happen

For reasons that still leave me, and many Londoners puzzled if not totally baffled, London’s City Council voted last night to send a message to Ottawa that they want no part of the looming Canada-European Union Free Trade Deal. Huh??

Let me get this straight, London City Council, who’s members complain regularly that they have too much on their plate and can’t make the committee meetings that already have scheduled, have elected to engage in a debate that is totally under the purview of the Federal Government and the results of which will not alter the outcome of the deal one iota. It somewhat analogous to the Feds debating over which potholes the City should fix in what order.
In fact the only outcome of last night’s debate is that we have once again sent a very negative message to the rest of the world that we are simply not interested in being a part of the very competitive global marketplace.

And it’s this repeatedly schizophrenic attitude on the part of Council that drives our business community crazy. On the one hand, we send our Mayor and a delegation of London business leaders to Japan, Korea, and China for the express purpose of opening new markets for our own exporters while at the same time attempting to attract new capital and jobs to come to London. Then you get a decision like last night’s that seems in total contrast to the Mayor’s (Council supported) mission to Asia.
Similarly, we claim we want to be on the world stage by attracting such events as the World Figure Skating Championships but we don’t want to be part of that same world stage when it comes to commerce. Go figure.

For the record, the Chamber has urged the Government to simply maintain the momentum towards concluding negotiations (emphasis on the negotiations part because that’s what governments do when they enter these deals), the details of which are comprehensive and very difficult.
Canada’s business community supports an EU-Canada agreement because it gives us an opportunity to preserve and enhance our economic well being by facilitating growth, innovation, and expansion in foreign trade and investment.

In fact Canada has a business sector that includes many world class companies and firms in sectors such as services, advanced manufacturing, and high technology. Canada also has a highly skilled work force. In order to capitalize on these advantages, we cannot confine ourselves to our domestic market.
A comprehensive agreement with the EU has the potential of boosting Canada’s income by $12 billion annually and increasing bilateral trade by 20 percent. The EU is already Canada’s second largest trading partner and the world’s largest importing market for goods, more than 2.7 times larger than the United States.

London manufacturers make products today that embody inputs that originate from many countries. Businesses need to have access to globally competitive inputs in order to remain competitive. Barriers to entry increase the cost of these inputs, thus increasing the cost to those consumers who have no alternative products to turn to, or forcing businesses to locate outside of Canada.

As we debate the pros and cons of the EU-Canada deal, other competitor countries have already entered into an economic and trade agreement with the EU, including Mexico – a NAFTA country. Others will follow. Just what we needed – Mexico with an advantage over Canada.

An agreement with the EU will further expand the global supply chain that London businesses can participate in and have access to, not to mention that the agreement would give Canadian/London businesses preferential access to more than 500 million consumers.

Although there are more issues on the table for this agreement than there were with NAFTA, they remain fundamentally about the rules of competition. They are issues that we will face in other trade talks, such as those dealing with the Trans-Pacific Partnership.

This is the time to devise a framework on how to address these issues for not only this agreement but also with an eye to future multilateral and bilateral agreements. In dealing with these issues, we need to ensure that we maintain our focus on fairer, more open competition. Failing to do so will, in our view, reduce opportunities for a generation of Canadians and hamper a much needed private-sector-led growth in an era of fiscal austerity.

London City Council voted against supporting the deal because they said they did not have enough details. And, like City Council, we want more details as well. Unfortunately, all we (the City Council) have succeeded in doing is letting the rest of the world know that London is either not interested in being a part of a much larger economic global village or that we prefer to pass judgment before we have the facts. Either message will leave a bitter taste in the mouths of those counties that we might have partnered with. Sometimes the best message is to say nothing.

In my view, while we await the outcome of these talks, Londoners would be better served by a Council whose focus is on property taxes, infrastructure, emergency services, affordable housing, development charges and a host of other municipally controlled expenses and leave the job of negotiating free trade deals with the appropriate levels of government.


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Filed under Business, Federal Policy, Municipal Policy

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