This week at the G8 Summit in Inniskillen, Northern Ireland,
there was discussion on free trade. There was the triumphant announcement that
the United States and the European Union are about to begin formal negotiations
on a treaty. There was also the admonition that after four years of talk, a Canada-EU
treaty was ‘really, really close.’
The usually suspects among the Canadian punditocracy have
greeted this news with the predictable requisite amounts of fear, trepidation
and angst. Oh no, they lament. What if the Yanks beat us to the punch? Still
others display a surprising amount of mental gymnastics by suggesting that
Ottawa should be faulted for not getting a deal by now AND that such a deal,
when ratified, would result in too many compromises to the Europeans. In the
world of political opinion, it is possible to such and blow simultaneously.There is often a fine line between ignorance and hyperpartisanship. Most times, they succeed in co-existing quite comfortably (thank you very much!). Of course, in the political world, there are no shortage of axes, places to grind them, or targets to swing at.
I have always believed that untruths commit two egregious sins. First, and most obvious, is the damage done by the lie itself. On the other hand, what often galls me more is the lack of effort and sophistication behind them. It’s bad enough that you spin me, but do you have to insult my intelligence as well? Lying is bad enough, but assuming that the target of your lie is stupid as well is beyond the pale.
Pundits always equate their opinion with truth. They try to make the subjective into the objective. A dislike of the taste of liver becomes the equivalent of 1+1 equaling 2.
For the record, I have no eternal truth on this issue of free trade with the European Union. I have an opinion, based on observation, making it as valid as anything you’ll read in a newspaper or hear emanating from the well quaffed talking head on your television.
So, let’s begin…
A Canada-EU trade
deal represents too much of a compromise
Perhaps it does. Maybe that’s why it’s taking so long. You
might not have read it, but neither have the people who are telling you about
it. They are doing the political equivalent of improv. They take suggestions
from the audience (Give me a topic…Free Trade with the EU….Okay, now give me a
position…I’m against it…Good! Now let’s begin!) then they write their columns
and do their interviews.Is it at all possible that the delay in ratification is a result of one, or both, parties not being satisfied that their national (or supranational) interests are not being met? If Ottawa agreed to everything Brussels wanted from the start, I suspect we’d already have inked the deal.
You can have speed, you can have caution – you can’t have both. People should know better than to suggest such a thing.
We have to hurry
or the Yanks will beat us!
Really? Exactly how long do you think it’ll take for a US-EU
deal to come into effect? Six months? Twelve? Twenty-four?Ask yourself how long the Canada-US FTA took to get done. The Americans are desperate for our oil, but how long has the whole Keystone XL approval dragged out? Anybody remember how many years after Free Trade where we still had to deal with softwood lumber?
But let’s not be negative here. Let’s assume that this agreement has been ordained by the Gods and has redefined what Washington considers a ‘fast track.’ Let’s assume that this treaty’s negotiation is the fastest in the more than 200 years of the Republic’s history. Okay, the treaty goes to the Senate.
Huh?
Silly rabbit – everybody knows that for a treaty to become US law it has to be passed by the US Senate. It’s in their Constitution.
Okay – no prob. Obama’s a Democrat. The majority of Senators are Democrats. He’ll tell them how to vote, and it’s all over except for the crying.
Yes – and with a Democratic majority in the Senate, look how easy it was for the White House to ram through healthcare reform, gun control and that little ‘fiscal cliff’ thingy. Let’s not forget that one-third of the Senate is up for re-election every two years, and that US Presidents would rather get a root canal than introduce any controversial topic just before a mid-term.
Let’s harken back to those wild and heady days of 2004, and the Australia-US FTA. President George W. Bush wanted it. The man running to replace him, John Kerry, wanted it. The Aussies wanted it. Slam dunk, right?
On June 24th of that year, Tom Steever of the National Farm Broadcast Service reported the following:
“The Senate Finance Committee
on Wednesday dealt a setback to the U.S. Australia Free Trade Agreement and
then held up final action on the deal. Key Committee Democrat Kent Conrad of
North Dakota succeeded by a single vote in amending the agreement, further
tightening beef import safeguards.”
Read that carefully, now – the last sentence. The Senate
Finance Committee held up the ratification of a comprehensive free trade treaty
between the United States and Australia ‘by a single vote’. Single. One.
Solitary. Alone. Yes, it eventually passed, but you get the idea.The truth is that Washington does not only play political hardball, they invented it and have turned it into a fine art form. If the negotiators from Brussels succeed in not losing their shirts in the rough housing with Obama’s emissaries, they still have to run the gauntlet of 100 Senators – 33 up for re-election every two years and all ready to turn on their party and their President if their seat depended on it.
Beat Canada to a deal? Yeah…right.
We need this deal
more than they do and they know it.
Sure about that? Take a look at the GDP figures for the EU,
and then compare them to Canada. Look at what’s going on in Greece. Look at the
number of European banks whose main shareholder is the government. Ask anyone
holding a bank account in Cyprus how they felt about the recent ‘surcharge’. If
you’re not convinced of the picture on the ground there, then fly to Madrid and
ask anyone on the street if they are happy that the national unemployment rate
is somewhere in the range of 25 percent.Don’t kid yourself – they need a deal as badly as we do. Probably worse.
The Best Defence
is a Good Offence
So far, it’s been looking at things from a different angle. Let’s
go somewhere that the pundits haven’t ventured yet. Let’s go on an adventure!The pundits do get one thing right,that weakness in the face of a negotiation is a monumental error. The question is 'whose weakness'?
In 2011, Statistics Canada reported that Canada's exports
to the 27 member EU stood at C$42.29 billion. What you might not realize is
that 46 percent of that, or C$19.37 billion, was with only one EU member -
Britain. The 2011 figures for the United States are not as dramatic, but of the
US$268.5 billion shipped to the EU, 20.8 percent, or US$55.87 found its way to
Britain.
In many ways, for both the US and Canada, trade with the European
Union is really trade with Britain. Bear in mind that this is the same UK where
the majority of people are dissatisfied with EU membership and that there is
good reason to believe they would vote to leave the EU in a referendum.
Ask yourself what the value of Canada-EU trade would be
if Britain were out of the equation? Well, simple math says it would drop
almost in half. Okay, under those conditions, what types of demands could
Brussels make on Ottawa (or Washington) for that matter?
If the value of EU trade for Canada plunged overnight from
C$42.29 billion to only C$22.92 billion while a trade deal was being finalized,
would it not seem altogether reasonable to assume that Brussels might have to
concede far more than it would have in the beginning? If the value of the
European market to the US dropped by 20 percent in one day, exactly what kind
of attitude shift would infect the American negotiators? Would they say that it
makes no difference? Would they say, perhaps, that $213 billion doesn’t get the
kind of compromises that $268 billion can expect?
A cynical person might suggest that with the possibility
of a British withdrawal from the EU being more than a statistical rounding
error, Brussels wants a deal sooner than later because a European Union without
Britain is less of a draw and a player with fewer high cards to play with
either Canada or the US. In geopolitics, as in life, people are not generally
amenable to paying full price for half a loaf.
When all is said and done, trade treaties are all about
the politics. If they were based solely on economics, we would have negotiated
global free trade decades ago and the WTO mandarins would not be feverishly
working to resurrect the Doha Round of talks like some latter day Lazarus.
Treaties are about politics, and politics is a lot like
shopping at a yard sale – searching for bargains and haggling over what to pay.
The seller wants a King’s Ransom while the buyer wants a freebee. Neither will
get their way if a deal is desired. The buyer will pay more, and the seller
will settle for less. Desire and desperation will determine where the two sides
meet.
Whether you think Canada-EU free trade is a good thing or
not is a debatable point. Whether or not you like Stephen Harper and his party
is an equally valid discussion. Neither of these discussions, however, suggest
the relative strengths and weaknesses of either side. A like of the Prime
Minister doesn’t give Canada the upper hand. Conversely, a hatred of Harper
doesn’t put Brussels in the driver’s seat. Both parties must contend with their
advantages and vulnerabilities, and whatever does come about will reflect just
that.
As for the optimistic assurance at
the G8 that a Canada-EU deal was ‘really, really close?’ It was the British PM,
David Cameron, who said it - not Stephen Harper.
