May 27, 2010
by Joe Terrett
Canada is negotiating a free trade deal with the European Union (EU), which is inciting the usual protectionist rhetoric about loss of sovereignty, industry, jobs and culture.
These are the same concerns expressed during free trade and NAFTA negotiations in the latter 1980s and early 1990s. For the record, bilateral trade increased 52% with the US. Employment has showed steady gains over the years, rising from 14.9 million jobs to 15.7 million by the early 2000s, and manufacturing managed to hold steady throughout this onslaught of prosperity.
Exports account for 45% of Canada’s GDP, but 87% of them go to the US. A paltry 4.7% go to the EU, a marketplace that is similar to our own in many ways and consists of 27 countries, 500 million people and $19 trillion in gross national product.
Although Canada’s trade relationship with the US has been lucrative, the events of the past year have demonstrated the folly of placing too many of our market-board protected eggs in one basket. Exports to the US plummeted last year by 35% and America’s ongoing domestic and international difficulties make Canada’s diversification of trade all the more necessary and urgent.
Thanks to the regurgitations of the Icelandic volcano Eyjafjallajokul (ay-yah-FYAH-lah-yer-kuhl), I was able to expand a three-day business trip to the Republic of Ireland by an additional seven days, which provided a wee bit of on-the-ground perspective based on this small, EU member.
A tour of Dublin revealed a dynamic busy, cosmopolitan city that is in many ways similar to Toronto, but with more historical architecture and much friendlier bus drivers. I also toured the Guinness brewery, enjoyed a pint of the famous stout and learned that the company’s founder, Arthur Guinness, wrangled a 9,000-year lease for a disused brewery sitting on four acres, at 45 pounds per year. You have to wonder how many pints it took to make that deal, but it has worked out nicely for the internationally recognized brewer. Its product is sold in 150 countries and brewed in 40.
Ireland, like Canada, is an exporting nation. It was an economic basket case in the later 1980s until it opened up its markets, reformed taxes and cut red tape. Today, this nation of roughly 4.5 million people—one million less than the Greater Toronto Area— is according to the United Nations, the fifth best country in which to live (just behind Canada) and it enjoys the highest trade surplus relative to the GDP in the EU. So far its sovereignty, prospertity and culture are intact.