The Cable

Canada and EU Notch Rare Win for Free Trade

But CETA may be the last win they see for a long time.


Proponents of free trade scored a much-needed win on Wednesday, after the EU parliament approved a landmark (and controversial) free trade agreement with Canada that was seven years in the making. But those wins may be fewer and farther in between now, with protectionist sentiments on the rise in the United States and many European countries.

Members of the European Parliament easily approved the Canada-EU free trade pact, known as the Comprehensive Economic and Trade Agreement (CETA), by a vote of 408 to 254. The vote was the last major hurdle to the deal, first signed by Canadian Prime Minister Justin (or “Joe“) Trudeau and European Council President Donald Tusk on Oct. 30 last year.

Backers of CETA, which scraps 98 percent of tariffs between the two sides, say it will boost economic growth, create jobs, and reduce the cost of goods. The EU said it would boost EU-Canada trade, currently valued at $63 billion a year, by 20 percent, and EU exporters are slated to save $525 million annually from reduced tariffs.

But CETA, which was seen as a prototype for a (now moribund) EU-U.S. trade pact, could be the last big free trade win for a while.

President Donald Trump pulled the plug on a huge free trade agreement with Asia as soon as he stepped into the Oval Office. And Trump’s top trade advisor said Brexit had already “killed” plans for the European trade deal, known as the Transatlantic Trade and Investment Partnership, and Trump had no plans of reviving it.

“We are killing ourselves with trade pacts that are no good for us and no good for our workers,” Trump said on the campaign trail in 2016. He pledged to throw out all multilateral trade deals to renegotiate bilateral ones, which experts say could well “turn back the clock” on trade, which has underpinned decades of global economic growth.

CETA sparked many of the same concerns as the TPP and TTIP. Critics argued the bill would sabotage EU environmental and labor regulations and empower corporations over the little guy. It faced stiff opposition, and at one point in late 2016 was declared “de facto dead” by some European lawmakers, until Chrystia Freeland, then Canadian minister of international trade, resuscitated it.

Freeland was reassigned to head the foreign ministry after Trump’s election. After salvaging CETA from a near-death experience, she now faces an even bigger task: ensuring that the U.S.-Canadian trade relationship, worth $2 billion a day in two-way trade, can weather the Trump administration’s vows to renegotiate NAFTA.

Photo credit: FRANCOIS LENOIR/AFP/Getty Images

Robbie Gramer is a diplomacy and national security reporter at Foreign Policy. Twitter: @RobbieGramer

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