According to an analysis for the European Parliament the EU-Canada trade agreement will likely erode the economic power of poorest States, condemned to be much poorer.
by Emanuele Bonini
It has been considered «a Trojan horse», an asymptomatic carrier of infectious diseases for the «made in», the workers' health and the national economies. Now CETA, the Comprehensive Economic and Trade Agreement between the EU and Canada, can harshly hit the developing countries. In other words the new trade deal is against the poors, according to a report from the European Parliament. Written under the request of the Committee on Development, the report pointed out that «it is likely that the implementation of mega-regional agreements will result in some preference erosion for developing countries». There is no doubt that CETA is a mega-regional agreement, so it is expectable to see the European Union and Canada trading more between themselves and less with other partners. Less business in the developing countries means to put at stake their future, and for such a reason the report suggested that the EU development assistance «should be targeted at these vulnerable countries and producers». The same report considered to recommend «a more targeted and perhaps extended programme of support» for those third countries affected by CETA».
Despite the impossibility of calculating the real impact of the new trade agreement, the European Parliament recognised side effects. The report made a distinction between the so-called ACP countries (African, Caribbean and Pacific states) and the Least Developed Countries (LDC). According to the different scenarios, losses for the ACP countries are estimated from 21.78 billion Dollars up to 50.31 billion Dollars, while for the second group of States losses range from 11.39 billion Dollars up to 16.24 billion Dollars. To put under pressure the least rich part of the world is the end of trade barriers between the EU and Canada. «CETA will have a very aggressive tariff elimination regime», making goods and products from different markets less attractive because less profitable. So, in the case of CETA analyses suggest that «there may be some preference erosion effects for developing countries, particularly those with concentrated export structures vis-à-vis the EU and those competing directly with Canada in EU markets». It's not only about that. In fact it is not clear whether such trade diversion could be offset by trade creation arising from the growth-enhancing effects of the CETA, particularly vis-à-vis the EU.
CETA is thus a case of unfair competition, if put in relation with the rest of the world. The study made for the European Parliament committee asked the EU decision makers to «target remedial interventions much more precisely and establish compensatory mechanisms using the EU development assistance budget», in the most typical western attempt of conscience clearing in front of a measure whose main effect will be the deepening of existing gaps instead of their filling.
It has been considered «a Trojan horse», an asymptomatic carrier of infectious diseases for the «made in», the workers' health and the national economies. Now CETA, the Comprehensive Economic and Trade Agreement between the EU and Canada, can harshly hit the developing countries. In other words the new trade deal is against the poors, according to a report from the European Parliament. Written under the request of the Committee on Development, the report pointed out that «it is likely that the implementation of mega-regional agreements will result in some preference erosion for developing countries». There is no doubt that CETA is a mega-regional agreement, so it is expectable to see the European Union and Canada trading more between themselves and less with other partners. Less business in the developing countries means to put at stake their future, and for such a reason the report suggested that the EU development assistance «should be targeted at these vulnerable countries and producers». The same report considered to recommend «a more targeted and perhaps extended programme of support» for those third countries affected by CETA».
Despite the impossibility of calculating the real impact of the new trade agreement, the European Parliament recognised side effects. The report made a distinction between the so-called ACP countries (African, Caribbean and Pacific states) and the Least Developed Countries (LDC). According to the different scenarios, losses for the ACP countries are estimated from 21.78 billion Dollars up to 50.31 billion Dollars, while for the second group of States losses range from 11.39 billion Dollars up to 16.24 billion Dollars. To put under pressure the least rich part of the world is the end of trade barriers between the EU and Canada. «CETA will have a very aggressive tariff elimination regime», making goods and products from different markets less attractive because less profitable. So, in the case of CETA analyses suggest that «there may be some preference erosion effects for developing countries, particularly those with concentrated export structures vis-à-vis the EU and those competing directly with Canada in EU markets». It's not only about that. In fact it is not clear whether such trade diversion could be offset by trade creation arising from the growth-enhancing effects of the CETA, particularly vis-à-vis the EU.
CETA is thus a case of unfair competition, if put in relation with the rest of the world. The study made for the European Parliament committee asked the EU decision makers to «target remedial interventions much more precisely and establish compensatory mechanisms using the EU development assistance budget», in the most typical western attempt of conscience clearing in front of a measure whose main effect will be the deepening of existing gaps instead of their filling.
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