I’ve been looking forward to this one — that, hopefully, Canada might formulate at least the basic framework for free trade agreements with the European Union. It makes perfect economic sense. The EU is Canada’s second-largest trade partner after the U.S. Last year, almost CDN$80 billion worth of goods and services were exchanged across the Atlantic. New trade agreements would make historic sense, too. Canada is a parliamentarian monarchy, pledging allegiance to the Queen of England.
Banding ourselves to the EU would also make geopolitical sense. Trading with Europe saves us a lot of headaches in contrast to trading with, and investing in, emerging markets such as China and India.
This is why a number of Canada’s CEOs have come together in an effort to push the issue of establishing free markets before the June 6th G8 meeting in Germany. Among many issues, the CEOs are looking to loosen sector-specific regulations, as well as accept professional accreditations across the Atlantic.
The latter has been a particularly sore point among European- trained professionals such as doctors, dentists, lawyers, architects, etc., immigrating to Canada. In Canada, it is not uncommon to see any one of those people driving cabs for a living, just because their foreign training makes it next to impossible for them to land jobs in their chosen profession. Considering how much it costs to train our professionals domestically, only to see them leave for greener pastures south of the border, the whole concept is ludicrous.
Another example where more trans-Atlantic cooperation would come in handy is the protection of intellectual property. In Europe, the intellectual property enjoys much more protection than in Canada. Having a free trade agreement would put pressure on Canadian legislature to move much faster.
A new free trade market is a nice idea, but is it feasible and wanted by both sides? According to Canadian CEOs, the idea is ripe for the picking. At this stage, it requires commitment in time and effort from both sides. That commitment is best achieved if there is a little “incentive” for all parties involved. For Canada, it is clear why it would serve its interests to have another free trade market. But what’s in it for EU?
For starters, establishing a free trade market with Canada could be perceived as a foot in the door into the North American markets. The EU has conquered its realm and now it needs to grow beyond its borders. In terms of total area, Canada is the world’s second- largest country; but it is a tiny market. The U.S., on the other hand, is a huge market, and talking to Canada could also open talks with the U.S.
In case our PROFIT CONFIDENTIAL readers are wondering why I got so excited about the potential for establishing the free trade market between Canada and the EU, you’ll have to wait for my next article in which I’ll discuss the disadvantages of trade agreements from investors’ perspective.