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To-and-Fro of Canada-EU Free Trade Deal

Author: Derek Fildebrandt 2010/04/08

Westerwelle_HartHouse_EditedTo: Germany, as a leading member of the EU is also leading the charge on the Comprehensive Economic and Trade Agreement (CETA) between the benevolent super-state and Europe Canada. German Foreign Minister Westerwelle of the Free Democratic Party (the junior coalition government partner and the most economically liberal - by European standards - in the Bundestag) went to far as to call Canada a "natural partner" for Germany.

Germany - as one of the few net contributors to the EU (now who conquered who?) - is on the hunt for markets beyond dilapidated Europe and its continued march into Asia (Volkswagen now sells more cars in China than in Deutschland), seeing Canada as not only a market in-and-of itself, but an obvious hub into the United States.

Canada's gain in a comprehensive agreement is obvious, being a commodity-based econony dependent on exports, but also in severe need of more competition for goods at home.

Fro: Supply-management. Like its cousins - farm subsidies and marketing boards - it played a decisive role in killing the Doha trade talks. It has the potential to scrape plenty of meat off the bones of any comprehensive trade agreement with the EU, and to no-body's advantage. Canadian consumers pay far above market prices for goods artificially produced in quantities below demand, as mandated by government. That's an obvious loss for consumers, and a loss for farmers that with artificial distortions removed - would move into other agricultural sectors that produce genuine profits with no glass celling (other than taxes of course). But that doesn't seem to ring a bell with Agriculture Minister of State Jean-Pierre Blackburn; who on behalf of the government passionately defends the system, going so far as to brag about limiting the import of milk.

Europe doesn't like this - although many-a Eurostans defend the same practice at home - and promises to be a major impediment to a deal. Maintaining these bizarre command-economy measures would be senseless  even if they didn't stand in the way of a free-trade deal with Micronesia, let-alone the EU. If maintaining forms of farm collectivisation is raised as an issue by the Canadian delegation, than it should be only as a stick with which to beat down Europa's own market distortions.

Cheaper carrots for all. Hurah.


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