Trade deals elude

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TRADE - Dinky for May 05, 2010 WInnipeg Free Press (WINNIPEG FREE PRESS) Photo Store

Prime Minister Stephen Harper and his government have been trying for four years to negotiate a free trade deal with the European Union. Reduction of trade barriers might benefit consumers and producers on both sides, but the prospects for an early agreement have faded lately.

Trade deals typically take longer than the parties expect, and the greater the volume of trade involved, the longer the negotiation. The leading current example is the Doha Round of trade negotiations among the 155 members of the World Trade Organization. Launched in 2001, the Doha Round talks are still theoretically in progress for the purpose of improving market access for developing countries, but none of the participating governments expects a conclusion in the foreseeable future. Failure of that process sparked attempts at smaller-scale agreements such as the proposed Canada-Europe deal.

Inquiring reporters in Ottawa lately have been told there may be a deal soon but something has to be worked out about access to Europe for Canadian beef, pork and wheat and something about patent protection in Canada for pharmaceutical drugs, as well as something about mutual access to government procurement. These questions might be resolved in a jiffy if there was an important reason for doing so, but there are plenty of reasons for delay and few for haste. The people and agencies with a privilege to protect -- such as provinces and municipalities that want to favour local suppliers -- know exactly who they are and what they stand to lose. The potential beneficiaries of freer trade are more diffuse and less keenly motivated.

The Barack Obama administration in Washington and the EU have announced they, too, will negotiate a free trade deal. This could create additional pressure on Ottawa and Brussels to conclude their deal quickly, while the attention of the parties is focused on the Canada-Europe project, but it could also have the reverse effect. The U.S., with 10 times Canada's economic clout, may stand a better chance of winning concessions in Europe, which this country could hope to share in a later deal.

Europe's horse meat scandal has cast a cruel light on the pretensions of the EU and European national governments to regulate the food trade. Someone in Ireland tested the beef in a frozen lasagna product and found out it was horse meat. Others started testing the beef in packaged food products and now horse meat is turning up where there was supposed to be beef in grocery store freezers all over Europe. This week the Nestlé company, one of the world's largest food processors, withdrew some prepared foods after they found that some of the beef was actually horse. In this case, a degree of free trade was achieved through fraud by packing houses and meat dealers, not by negotiation among governments. There is only so much merit in asking governments to change their rules when the enforcement is spotty at best.

The political winds in the United Kingdom have shifted against Europe in recent weeks. Prime Minister David Cameron announced in January he will seek to repatriate certain powers that the EU has taken over from national governments and will then hold a referendum in 2017 on the U.K.'s continued membership in Europe. He says he will favour staying in Europe, as do the leading union and industrial groups. An opinion survey in January, however, showed half of the public would vote to quit Europe while one-third would vote to stay in.

From one week to the next, one government or another is either quitting the European Union or kicking their neighbours out. Usually nothing comes of these angry gestures, but the steady drumbeat of discontent shows the limits to popular consent underlying the formal actions of the European Union. A free trade deal with such an unstable entity is no doubt worth pursuing, but the benefits are a bit hypothetical.

Republished from the Winnipeg Free Press print edition February 22, 2013 A8