By Nick Dearden
It's been a bad week for the Canada-EU trade deal known as CETA. In Germany, over 300,000 protestors marched against the deal on Saturday – and they were joined by demonstrators in cities across Europe and Canada. Warfare has broken out in Germany's main centre-left party, the SPD, where the grassroots are attempting to force the party leadership to take a position against the deal.
Meanwhile, disquiet and opposition in numerous countries from Belgium to Romania, means that even a positive vote in the European Council in coming weeks is no longer a forgone conclusion. And that's before CETA makes it to the European parliament in the Autumn. Finally, an academic report entitled 'CETA Without Blinders', released on Friday, finds that CETA will fuel unemployment and inequality, benefitting mostly those at the top of society.
To recap, CETA contains many of the same provisions as its better known sibling TTIP. In particular, it aims to get rid of 'regulatory barriers to trade' in Europe and Canada.
Sounds good? The problem is that some of these barriers turn out to be things we quite like – like environmental safeguards, decent quality food standards, laws (however inadequate) to control the behaviour of big banks. In particular, it contains a 'corporate court' system. This allows Canadian multinationals – and the many US multinationals with subsidiaries in Canada – to sue European governments for making rules which might damage their profits, in a special court, which exists just for them.
So why do so many governments want it? Well the core argument in favour of CETA is that it will mean more jobs and more growth. But that's precisely what Pierre Kohler and Servaas Storm dispute in their new paper. They argue that official predications for the economic impact of CETA are based on false assumptions and that, in fact, CETA will be disastrous for employment, for inequality and for welfare spending.
First, CETA will make the average worker worse off. This shouldn't really be a surprise – given that the whole point of CETA is about giving corporations more power while pushing the pressure to be more competitive onto workers. By 2023, the authors predict, the average worker will have lower earnings than they would otherwise, amounting to €1776 in Canada and up to €1331 in the EU.
What's more, CETA will lead to job losses. By 2023, about 230,000 jobs will be lost in CETA countries, the vast majority in the EU, and 80,000 more jobs will be lost in the rest of the world. Here in Britain, 10,000 jobs are predicted to go, with workers just over €300 worse off.
This damage will be compounded by a net loss in government revenue and the authors predict that government deficits will also increase in every EU country. CETA will also increase inequality within Europe, with the UK, in particular, losing out to Germany, France and Italy.
The big winners, though, will be the super-rich, as it will be workers that bear the brunt of downward pressure, as those at the top increase their share of the economic pie. Any growth is gobbled up in profits, not wages.
The authors end by concluding that the strategy of simply boosting exports and making us more competitive by lowering labour costs – a major focus of many in the current UK government – is not a substitute for investing, and rebuilding our economy from the bottom up. Making ordinary people poorer is not going to build sustainable demand in the economy. Ultimately, the CETA strategy is simply a continuation of the same failed policies of the last 30 years – more powerful finance creating more debt to paper over the cracks of an unsustainable economy, getting more unequal by the day.
Brexit doesn't get us out of this awful deal. The current UK government speaks glowingly of CETA, and is trying to implement it as soon as it’s passed through the European Parliament – probably early next year. This will mean much of it coming into effect before there has been a vote – or even debate – in Westminster. They then hope to lock us into CETA even after Britain has exited the EU.
An undemocratic method of passing an undemocratic trade deal. We only have six months to stop it.
Nick Dearden is the director of Global Justice Now.
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