Trade deal with Europe Harper's crowning achievement: Duncan Hood

But it won't be perfect

cb cheese aisleLast week Stephen Harper announced what will likely prove to be his most important accomplishment as prime minister. The deal is not yet ratified, and the text has not been released, but on the basis of what has been made public, the Comprehensive Economic and Trade Agreement is one of the most beneficial agreements Canada will ever sign. In some ways, it is more important than NAFTA.

The EU deal will open up a market that is larger than the U.S., eliminating 100% of the tariffs on non-agricultural goods, and most of the agricultural ones as well. The 8% tariff the EU currently slaps on Canadian maple syrup? Gone. The up to 20% duty on Canadian shrimp? Also gone—along with many others.

Canada will be allowed to export more cars to Europe, and we’ll pay less for a Mercedes assembled in Germany. The pork and beef markets of Europe—all but inaccessible until now—could soon be worth a billion dollars a year. Our ice wine will find new fans in Luxembourg, and Canadian shoppers will finally (finally!) pay more reasonable prices for wine from Italy, France and Spain. For that alone, I would support the deal.

But the freer trade of goods and services is only half the picture. Much of CETA is aimed at reducing barriers to the flow of skilled labour and capital between Canada and Europe. The agreement will streamline the recognition of professional qualifications, making it easier for Canadian engineers to work in Sweden, and for Austrian accountants to work in Canada. It will encourage EU nations to pump foreign direct investment euros into Canada to take advantage of our easy access to the U.S. market. It will help Canadian executives get temporary work permits overseas. All in all, the agreement, slated to be in place by 2015, could boost our GDP by $12 billion and help create some 80,000 jobs.

It won’t be perfect, of course. There will be complaints about what we have given up, complaints about the paperwork, and individual sectors that have lost some of the protection they once enjoyed—such as the dairy farmers and the generic pharmaceutical manufacturers—will howl. But we can’t help but gain more than the EU. After all, given our relative size, we have more to gain by opening our market to them than they do by opening their market to us.

We negotiated this agreement during a period when the EU was weak, allowing us to gain concessions we wouldn’t have received in better times. Yet it will come into effect just as the EU gets back on its feet, allowing our companies to share in and profit from its recovery. The combination of new market access and new competition will help to get Canadian large businesses spending again. CIBC is already predicting a surge in corporate investment next year as the global economy continues to improve. The EU agreement will help.

Perhaps most important, this deal will provide the momentum needed to seal other trade agreements we’ve been pursuing, such as the Trans-Pacific Partnership, and a deal with South Korea. It provides a template for what those agreements could look like, as well as a model for bringing the provinces onside. It also provides incentive for other countries to sign on, lest they be left on the sidelines. So pass the slightly cheaper Camembert and crack open a bottle of reasonably priced Spanish cava. After years of worry and austerity, it just may be time to celebrate.