Trade deals are at the heart of commerce these days.
Countries around the world are looking to forge agreements as a way to smooth the traffic of goods.
It is no longer sufficient to go out looking for a product, find a good deal and buy a product on the international market. Today the deal has to fall under a trade deal that assures market access usually tied to some level of reciprocal trade access.
These trade deals are of course not without issues of their own. The ink is barely dry on many, there are voices of dissent, and usually court cases arise, leaving lawyers and judges to put the final details on the wording of the actual trade deal.
So the trade deals have their inherent flaws, but they are still generally an asset, which is why Canada continues to negotiate toward ever larger trade groups.
But getting deals done is never easy, and most ultimately end up watered down on some level in the game of give-and-take that is negotiation.
Most recently Canada has being working toward a Comprehensive Economic and Trade Agreement (CETA) with the European Union (EU).
But the deal is one showing just how fragile such negotiations are, whether they would be good for the vast majority, or not.
Canada’s trade minister walked out of talks in Belgium recently, citing that the EU was incapable of inking a planned transatlantic free trade deal.
It’s a strange situation to be sure, since all 28 EU governments support the CETA.
Tiny Belgium, however, cannot give assent without backing from its five sub-federal administrations, and French-speaking Wallonia has steadfastly opposed it.
The deal would be a landmark as it would be the first between the EU and a G7 country.
It is also an agreement that has proponents predicting an increase in trade between the partners of 20 per cent, or more than $10 billion a year in Canada. It is those sorts of numbers which make CETA a coveted agreement.
Canada is already the EU’s 12th-largest trading partner.
But back to the fly in the ointment in terms of inking a deal.
Wallonia is home to about 3.5 million people, less than one per cent of the 507 million Europeans CETA would affect, but the deal rests on the will of its government.
So again we see just how fragile a deal can be. That is especially the case for deals which encompass ever larger groups of countries. It takes only one to put the skids on things.
We have certainly seen the scale of a deal to be an issue in the past, with the World Trade Organization talks always being prolonged affairs as countries wrangle to get just a bit better deal for its people.
And there is more to this trip-up than the deal between the EU and Canada. The fact that the process can be tripped up by such a small protest vote does not send a positive message in terms of future trade deal negotiations.
The EU, as an example, would like to see CETA duplicated in deals with the United States or Japan and are potentially opening up talks with partners such as Australia and New Zealand. But with an obvious stumbling block, the desire to undertake the rigours of negotiating cannot be high.
And there is the British element too. Britain holds out hopes of forming a new trading relationship with the EU 27 after it has exited the bloc. But the CETA experience has to sour that vision.
Certainly the freer agricultural products can move the better for Canadian producers, although there remains some solid reasons for protecting key sectors, but that is why deals are negotiated.
