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Who Pays for “Free” Trade?

The Comprehensive Economic Trade Agreement and Nova Scotia

by Robert Devet

Increased trade with the European Union will be good for the Halifax container pier. But a new CCPA report argues that we also need to consider the many drawbacks that a free trade agreement will bring. [Photo: Simon de Vet]
Increased trade with the European Union will be good for the Halifax container pier. But a new CCPA report argues that we also need to consider the many drawbacks that a free trade agreement will bring. [Photo: Simon de Vet]

The Comprehensive Economic Trade Agreement (CETA), which is currently being negotiated with the European Union, will be bad for Nova Scotia — that is the conclusion of a report recently released by the Nova Scotia chapter of the Canadian Centre for Policy Alternatives (CCPA).

Angela Giles, Atlantic regional organizer with the Council for Canadians and co-author of the report, tells the Halifax Media Co-op what troubles her most about the negotiations is how the agreement will interfere with Nova Scotia's ability to determine its own policies. 

“I expect that we will see an increase in foreign investors taking the province to court because provincial policies are perceived to be discriminatory to foreign competitors. The Bilcon lawsuit under NAFTA is a case in point.” Bilcon is the American company suing Nova Scotia for damages exceeding $100 million because its Digby Neck quarry proposal did not pass a provincial environmental assessment. 

“CETA will open the door for more such lawsuits. Rights of corporations are put ahead of the rights of elected governments,” says Giles.  

The report argues that since there is a substantial Nova Scotia trade deficit relative to the European Union we are more likely to be the overall losers once the trade agreement becomes binding. The CCPA report predicts a net loss of 500 to 2,600 jobs, with some small job gains in resource-based industries being negated by more substantial job losses in our manufacturing industries.

Provincial spokesperson for Economic & Rural Development and Tourism, Brooke Armstrong, neither confirmed nor denied these numbers in an email to the HMC dated Oct. 30: “Nova Scotia has identified the potential gains and risks in any agreement. We are not prepared to undermine our position in negotiations by discussing these publicly, but we will only support an agreement that is, on balance, in the interests of Nova Scotia and its people."   

The CCPA report points out that the negotiations have an anti-protectionist bent that far exceeds the traditional free trade focus on tariffs and quotas.  Any regulatory measure that can be construed as shielding our domestic market from competition is in scope. This can become an expensive proposition for Nova Scotians. For instance, the European demand that name-brand drugs be protected for a longer time before generic equivalents kick in will add an estimated cost of $70 million annually to our provincial health budget. 

“Again we see CETA making it more difficult for the province to implement a policy that is good for Nova Scotians,” says Giles.    

The CCPA report argues that a strong Nova Scotia agricultural sector is also at risk since our supply management practices in dairy, poultry and eggs industries can easily be construed as unfair protection against European competitors. The Conservatives distaste for supply management altogether, as witnessed in their eagerness to eliminate the Wheat Board, makes it difficult to believe that Harper will put up much of a fight if the Europeans decide to make this an area of contention.  

The report points out that Nova Scotia municipalities are very much affected by the trade talks. Their ability to support local businesses through the tendering process is something that is widely expected to be disallowed under the agreement for procurements exceeding certain defined thresholds. When awarding large contracts in the future, municipalities will no longer be able to give any preference, no matter how small, to local businesses and local jobs.

The Dexter government doesn't share these worries. Armstrong told HMC, “Municipalities are already subject to obligations under existing agreements, and at lower thresholds than CETA will have. The province has worked directly with municipalities to identify any effect the proposed treaty may have on them.“

Giles is not convinced: “The provincial government is too quiet, which is disappointing but indicative of the little discussion of CETA that originates in government circles and mainstream media.”  

It is important to understand that negotiations are being conducted in secret. The little we know is based on what the Harper government is willing to share with the public and whatever gets leaked. The provinces are at the table, but only as observers and not at all times; municipalities are not at the table. 

Nonetheless there is an expectation that the results of  the negotiations will be submitted to parliament for endorsement in early 2013, if not before the end of this year. Both the federal NDP and Liberals are raising concerns similar to those found in the CCPA report.  

When asked whether acceptance of CETA is a foregone conclusion given the majority status of the Harper government Giles remains optimistic: “We are working with the Europeans opposed to this treaty. It is expected to take three years for CETA to be proclaimed in Europe, so there still is time. Also, at the European Union's insistence, and reflecting the European appetite for municipal contracts in Canada, there is an understanding that provincial legislatures will need to approve the agreement. So once again, there will be opportunities to voice our opinion.”

There's one thing Giles is very clear about: “We need to raise this with our representatives in municipal and provincial governments. We need to ask the questions; the Chronicle Herald isn't going to do it. We continue to hear about the same one or two benefits over and over, but nobody in the mainstream is doing the necessary critical thinking."

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