German top court backs EU-Canada trade deal CETA
October 13, 2016 7:26 AM   Subscribe

BBC: "Germany's Constitutional Court has rejected a legal challenge to the EU-Canada free trade deal (CETA) from campaigners who call it undemocratic. The campaigners object to the fact that parts of CETA will be implemented before all national parliaments in the EU have voted on it. EU trade ministers are to vote on CETA next week. It requires unanimous support. If they all approve it, the deal can be signed on 27 October. CETA would remove many trade barriers."
posted by marienbad (18 comments total) 3 users marked this as a favorite
 
Are there any downsides to CETA? Free trade agreeements have always benefited Canada until now.
posted by My Dad at 8:48 AM on October 13, 2016


Regardless of whether the trade agreement is good policy or not, lawsuits like this - governmental action is invalid because it's bad policy - are generally tossed out.
posted by jpe at 9:00 AM on October 13, 2016 [1 favorite]


CETA text here. Fill your boots.

Shorter, official Canadian government overview here.

That overview is clearly trying to sell it. Of note: it will eliminate the 8% EU tariff on maple syrup.

Here's a less optimistic view: Canada-EU trade deal will result in job losses, lower wages, and worse inequality

In related news: José Bové, European politician who opposes trade deal, allowed to stay in Canada

And, finally, the headline writer here just couldn't resist the temptation to alliterate (I, too would have succumbed):

Trade negotiators woo Walloons in leaked Canada-EU statement
posted by mandolin conspiracy at 9:14 AM on October 13, 2016 [2 favorites]


Here's a less optimistic view: Canada-EU trade deal will result in job losses, lower wages, and worse inequality

The same thing was said about NAFTA in Canada, and that didn't happen... exactly (in fact, over the past 25 years middle class incomes have increased in Canada).

Until the financial crisis and the collapse of the auto industry in 2008, Canadian manufacturing jobs increased. Canada developed a mixed economy as Canadian parts suppliers became highly integrated with the US auto industry.

Canada managed to escape the worst of the financial collapse by relying on the energy sector... which is now tanking. There is 10% unemployment in Calgary of all places.

CETA seems to be more political than anything else. Only the private sector an engage in international trade, and, due to the distances involved and the sheer cost of shipping goods to market, it doesn't seem likely that CETA is going to open the floodgates to cheap European imports.

In terms of agricultural products, we already import food from Mexico, Chile, New Zealand and of course the United States anyway.

Maybe IP and pharmaceuticals will be disrupted?
posted by My Dad at 9:57 AM on October 13, 2016 [1 favorite]


I don't want to get into an argument, but the FTA and NAFTA were not wholly good for the country. There were sectors and industries and areas of the country that suffered under both trade agreements--some of which have never recovered. I have no problem with any Canadian being wary of any trade deal, especially given the way previous governments (especially Harper) were more than stingy in releasing details about what was actually covered under the deals.
posted by sardonyx at 10:05 AM on October 13, 2016 [5 favorites]


There were sectors and industries and areas of the country that suffered under both trade agreements

Had those deals not been made there's no guarantees that there would have been no suffering or failure of certain sectors. And the rest of the country would have had growth slowed by having to pay more for domestic goods vs cheaper imported goods.
posted by GuyZero at 10:14 AM on October 13, 2016 [1 favorite]


I don't want to get into an argument, but the FTA and NAFTA were not wholly good for the country. There were sectors and industries and areas of the country that suffered under both trade agreements

Why not discuss? I'm totally willing to admit that I'm just an opinionated guy on the Internet; I'm no trade expert, and I'd love to hear other opinions. I did work for ten years in the economic development field, including in government, and also for JETRO. But I left that world about 6 years ago.

Besides, coming from British Columbia, NAFTA looks particularly good: it gave small exporters, notably manufacturers of high-value equipment and machinery, access to a massive market. Victoria, BC, where I'm from, has totally and absolutely changed over the past 25 years, thanks to access to this huge market.

The one industry that has suffered over the past 25 years is the forest industry—ironically because it is generally not covered under NAFTA. At the moment the US is going to war with British Columbia again over softwood lumber (used for making houses). This continual litigation by the US is totally contrary to the spirit of NAFTA.
posted by My Dad at 10:36 AM on October 13, 2016 [2 favorites]


Honestly, because I don't have the time (I'm working and I only limit myself to reading MeFi on short breaks) or the energy to debate anything as complicated as this. I can sit here and pick out industries that suffered and regions that suffered and it won't do any good. I can waste time looking up and then throwing statistics out like confetti and somebody will say (as they already have upthread) "you have no proof they wouldn't have suffered otherwise." Nope, I don't. Just as I have no proof industries that profited only profited because of the trade deal.

I also don't believe there is only black and white in this world. Everything is touched by shades of grey, and trade deals are certainly no exception. Overall, I can acknowledge certain deals as generally good or bad, but even the best ones aren't perfect and contain aspects that are less than ideal for certain groups.

Do I recognized that liberalized trade deals are the way most international trade is going? I'd be a fool not to. Do I think liberalized trade deals are good for businesses in general? Mostly I do. Do I believe that liberalized trade deals are idea arrangements for local workers or for average middle class or working poor citizens in most countries? Not really. But then the question becomes how do you balance the good of the worker versus the good of the business when you're looking at the overall economic health of an economy or a country, and that's a juggling act that is beyond my capacity to argue at the moment, especially since my resources are limited and I've learned through long experience on the Internet not to squander my energy and resources arguing with people who post blanket statements about complex, nuanced topics.

Additionally, I feel it's especially futile to rehash the FTA or NAFTA here in this space when the subject on the table is CETA. Now personally, I haven't delved into the CETA details yet. The last deal I paid attention to was CUFTA, and even then I didn't go into it as thoroughly as I could have or (possibly) should have.
posted by sardonyx at 11:07 AM on October 13, 2016 [2 favorites]


From the Andrew Coyne article linked above:

the top one per cent now pay about 33 per cent of their income in tax, on average

I'd be happy to see how 90 per cent works out...


"And the rest of the country would have had growth slowed by having to pay more for domestic goods vs cheaper imported goods."



Ok by me.
posted by not_that_epiphanius at 12:07 PM on October 13, 2016


If trade deals are bad, then more borders must be good. Taking this little further, free trade across US State borders is harmful as well.

Shouldn't step there though, since trade and free movement of people is bad.

People from Boston, MA are stealing jobs from Cambridge, MA. Dirty hippies from Cambridge are pushing up the Red Sox ticket prices for the residents of Boston.
posted by zeikka at 1:12 PM on October 13, 2016 [3 favorites]


It's the same old shit, just pushed through another door.
posted by hat_eater at 1:33 PM on October 13, 2016 [1 favorite]


>"And the rest of the country would have had growth slowed by having to pay more for domestic goods vs cheaper imported goods."


Ok by me.


Not okay by me. While I agree with Andrew Coyne, being merely "middle class" doesn't mean there are significant financial pressures when trying to raise a family. Thank goodness for Walmart and Costco is all that I can say. And I already do my part—I support supply management by paying an arm and a leg for milk and cheese, which my children seem to like for some reason.

Besides, can Canada really pursue a policy of autarky and produce everything it needs within its own borders? I don't think so. I won't use any overtly ridiculous examples, but what about computers? As it is laptops are about 20% more expensive in Canada than they are in the US. Hell, everything is already more expensive here than south of the border. It's because Canada is a small, small country, with no economies of scale. Free trade and access to global markets is the only thing keeping the middle class afloat in Canada.
posted by My Dad at 1:53 PM on October 13, 2016 [6 favorites]


I'm not sure NAFTA was such a great thing because it ties us more closely to the US economy, which is run by giant corporations and people like Paul Ryan (and that's before we even start talking about ISDS). If we voted in US elections, maybe, but I see it as a sovereignty leak. Believing that cheaper goods always justifies free trade seems just as good a reason to avoid joining the race to the bottom.

And the history of abuse and litigation around softwood lumber is a great example of what a trade agreement is supposed to prevent. Coincidentally, I came across these two articles about the softwood lumber agreement yesterday. I thought the difference in tone and agenda were telling:

Flathead Beacon: "The U.S. timber industry says Canadian producers are benefiting from an unfair cost advantage by exporting subsidized softwood products that are undercutting U.S. producers."

But this has been the the Lumber Coalition's (TINC!) main argument since before NAFTA, and there's all this anti-Socialism rhetoric that makes me think this issue is driven by ideology as much as simple protectionism (which is fine, right? I mean, that's how things work).

"Yet since then negotiations have stalled and Canada has not engaged with U.S. trade reps to make any progress, according to the U.S. Lumber Coalition."

Globe & Mail: “While our engagement has yet to produce a new agreement, our governments will continue negotiations though the standstill period has expired,” Canadian International Trade Minister Chrystia Freeland and U.S. Trade Representative Michael Froman said in a joint statement.

Another recent article (sorry, can't find it) suggests that the real underlying issue is the low Canadian dollar. Much as I dislike NAFTA, it seems preferable to fighting an endless and very expensive battle -- how long has this one been going on? And I remember that solving the softwood lumber dispute was one of the better reasons for agreeing to NAFTA in the first place.
posted by sneebler at 4:48 PM on October 13, 2016


The issue with softwood lumber is how different provinces calculate stumpage fees. From the American perspective, stumpage fees are too low, which constitutes an illegal subsidy. The other problem is that different American states (theoretically all 50 of them) use litigation as a strategy.

I don't think the challenge is ideological in nature—there is nothing socialist about British Columbia, we have the smallest government in Canada, and the highest rates of child poverty—and instead I think it's hardball politics.

Typically it takes political pressure from the President of the United States to coordinate a softwood lumber deal, and President Obama has, ever since being elected, been pretty antipathetic towards trade with Canada, and consistently underminded NAFTA.
posted by My Dad at 5:05 PM on October 13, 2016


You and I think there's nothing Socialist about BC, but it's a convenient bugbear for US audiences.
posted by sneebler at 5:47 PM on October 13, 2016


Regardless of whether the trade agreement is good policy or not, lawsuits like this - governmental action is invalid because it's bad policy - are generally tossed out.

I haven't followed the CETA discussion closely, but just one remark: The lawsuit wasn't tossed out because it's "bad policy". And as far as "the real issues here" are concerned, such as labor, environmental, exchange issues, etc., they are certainly discussed by politicians and in the news in Europe, but none of those were dealt with by the court.
As far as I understand it, the court had to deal with one main issue: Is the CETA agreement unconstitutional because the German people didn't get a chance to vote on it?
That is, did the Bundestag (i.e. the German people's representative) get a sufficient chance to vote on the whole thing or is democracy being bypassed? It's a complicated issue mainly concerning constitutional law and how much authority can be transferred to Brussels.

Also, as I understand it (and what's lacking in the BBC article), the decision was about the injunction, i.e. the preliminary proceedings, and the main proceedings are yet to come. So "German top court backs CETA for now" might be a more accurate headline.
posted by sour cream at 1:40 AM on October 14, 2016


So-called "free trade agreements" harm the fabric of society. These policies tend to be anti-democratic, anti-socialist, etc. We know this because they are in practice formulated by lobbyists that serve global corporations. These entities have interests in conflict with those of the state and of the working classes. The agreements enable companies to sue states for "harming potential future profits", and so on. Policies often have provisions that thwart state regulation, and this includes complete denial of climate change.

That's the high-level explanation via Noam Chomsky. At the very least, the above critique that he gives is a rather conceptually challenging one, right? For instance, the relationship between "free trade agreements" and global warming, and whether that portrayal is consonant with your personal values. It's an abstract argument with many parts, which also makes it intellectually difficult, but I feel there's something there worth examining for ourselves.
posted by polymodus at 2:35 AM on October 14, 2016 [1 favorite]


Are there any downsides to CETA?

Michael Geist has lately become my usual source for concise analysis of the downsides of these absurdly complicated trade deals.
posted by sfenders at 8:25 AM on October 14, 2016 [1 favorite]


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