“One of the key factors is our openness to the world”
Interview: Robin Fehrenbach
Dr. Ailish Campbell is Canada’s Chief Trade Commissioner and assesses the outcomes one year after CETA’s implementation: 99 percent of the Canadian-European Free Trade Agreement have already come into force, and the exchange of goods has already been stimulated noticeably. Campbell also explains in the conversation what is at stake in the final phase of the NAFTA renegotiations with the United States. Read in the following a shortened version of our Transatlantic Call with Dr. Campbell.
Dr. Campbell, the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union is generally regarded as one of the most progressive, fair, and ambitious Free Trade Agreements at least of the last few years. CETA has provisionally entered into force on September 21 of 2017. Since then one year has passed. Can you tell us how the ratification process is making progress?
I am very pleased to say that 99 per cent of CETA on a trade-weighted value perspective have come into force. These are the elements that are under Commission authority on your side and which here in Canada are clearly under federal jurisdiction. The agreement now also requires ratification in member states.
Which economic successes in trade and investments can already be seen from CETA?
I would note that exports from both the EU and more specifically from Germany to Canada are up to 7.8 percent. This is only merchandise export of goods. We are also awaiting annual services data. Here in Canada trade is also up overall to the European Union including up 7 percent to Germany. The idea, though, that we should only look at what we are exporting to one another as if that is the measure of the agreement, does not provide a full picture. You may recall that there is someone else who is very focused only on the trade balance.
You are referring to U.S. President Donald Trump.
Correct. We have to look at our two-way foreign direct investments, our innovation collaboration, our collaboration on the environment including the implementation of the Paris agreement. Student exchanges and a very rich history between Canada and Europe are also included in the full picture not only in the sense that a good portion of Canadians are of European descent. But also in the sense of continuing to do fantastic innovation together including clean cities and mobility. CETA is just one element of our long and enduring relation and collaboration. We should also take a more holistic view of our economic and social linkages.
The agreement is particularly progressive in terms of labor rights and environmental protection. Quite frankly, it is a masterpiece of negotiation led by Chrystia Freeland, now Canada’s Minister of Foreign Affairs and the former Minister of International Trade. Does CETA have a positive impact on other negotiations of free trade agreements?
We hope so. Certainly, we have used aspects of the CETA negotiations in our work on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) specifically looking at issues related to the environment as well as labor. As you are seeing NAFTA being renegotiated we long had labor and environmental chapters there. We would like to see those become more robust. We also proposed a chapter on gender and on indigenous first nations’ trade in NAFTA as well. We will only see as these negotiations conclude what is in the final agreement. You have hit on a really important point. It is very simply this that our values are very well aligned between Germany and Canada, in particular the high protection of labor.
Our values are very well aligned between Germany and Canada, in particular the high protection of labor.
In the Mexico-U.S. negotiations on NAFTA our general position was: Please negotiate whatever you want into the highest standard. Because Canada continues to have the highest all-in wage compensation for workers. We continue to have the most robust public health care system. We are far more like Europe and various models particularly France and the UK than the US on health care.
The original North American Free Trade Agreement NAFTA which was ratified in 1994 is being renegotiated between the USA, Canada and Mexico. Can you tell us in which phase the negotiation is at the moment?
Today my Minister, Chrystia Freeland, is flying into Washington. The negotiations continue. We have modernized NAFTA twelve times before. New issues come to the forefront, some of those are in CETA: Everything from e-commerce to improved services standards to trade in data and digital as well as improved environmental protection. All of these things are certainly on the agenda for us. We have an offer to the US that is under ongoing negotiations right now. Prime Minister Trudeau has been quite clear publicly about where some of the tougher areas are. Those include access to our dairy industry and issues around our cultural exemption which we maintain to particularly guard French language rights in Quebec and the ability to produce our own national content. A third issue would be chapter 19 which concerns the settlement of disputes. Minister Freeland has been very active with her counterpart Robert Lighthizer. In fact, the CETA negotiator Steve Verheul is our chief negotiator for NAFTA as well, and Steve is excellent. So, we are very well prepared. Certainly, we want to see a deal that works for all three parties, Canada, Mexico and the United States.
Certainly, we want to see a deal that works for all three parties, Canada, Mexico and the United States.
Do you think the deadline that has been communicated, October 1st, is realistic?
We are working hard. I certainly hope that our American friends will see the value in what we have tabled as our proposals.
After the U.S. government decided to pull out of the completed Trans-Pacific Partnership (TPP) between the United States and eleven further nations in the Pacific Rim, the agreement was ratified as the now so-called CPTPP by the remaining group of states including Canada. How does CETA combined with CPTPP place Canada in a strategic position for Canadian companies and foreign direct investment?
It is very clear: Canada is not the United States of America right now, it never has been, and it never will be. One of the key factors for us right now that makes us very different from the United States is our openness to the rest of the world. Our position is that we want to be the gateway on our east coast and across the country of course to CETA, to NAFTA and an effective agreement with the Americas. We are also negotiating with the Pacific Alliance in South America as well as Mercosur. We concluded the CPTPP because we find it very important to set high standards and rules including the engagement of our state and enterprises in the market economies with Asian partners.
We concluded the CPTPP because we find it very important to set high standards and rules including the engagement of our state and enterprises in the market economies with Asian partners.
Having a deal with Japan, we felt has tremendous value. It is an incredibly wealthy and important G7 country but also one that shares our values in protecting the environment and consumers. So, locking in that deal, it is very important to set standards that influence supply chains. This is the kind of deal which we hope will be open over time after ratification of the initial group of members to other countries. We will also continue to watch what goes on with the UK and Brexit depending on their decisions. We just had Liam Fox, the UK Minister for International Trade, here. We have said that if and when those exit negotiations conclude, we would also conclude a free trade agreement with the UK.
In general, as a country of 37 million people, this gives us access to over 1.2 billion consumers in the world’s richest markets: the EU, the US, Mexico, Japan, Vietnam, Malaysia and the other TPP members.
Would you recommend CETA as a role model for the United Kingdom and its future relationship to the EU?
Maybe you have seen this illustration from the European Commission trying to tell the United Kingdom how much it would lose in terms of influence by leaving the European Union. For example, it showed AFTA (ASEAN Free Trade Area) and other relationships including CETA. The Canada-EU deal was portrayed as a series of many steps. It is not a membership with the EU, we don’t have a fiscal arrangement, the Common Agricultural Policy, and Schengen. The fact that the UK never joined the Monetary Union is another important aspect. CETA is absolutely a model for the UK. But that will be up to the UK government to decide what it is pursuing. I was joking with my UK counterparts who were here: That if they copy the agreement, we should probably charge them a license fee.
CETA is absolutely a model for the UK. But that will be up to the UK government to decide what it is pursuing. I was joking with my UK counterparts who were here: That if they copy the agreement, we should probably charge them a license fee.
Free trade agreements are complicated treaties full of technical details. The bigger picture of it however symbolizes openness and cooperation in a globalized world. Does free trade have the potential to offer opposition to the trend of protectionism and isolationism around the world?
I definitively subscribe to the trade theory of peace which is that it is harder for countries that are more open and integrated to go to war with one another, that they instead see what they have in common. That has to be joined, though, with ongoing dialogue on a host of other issues. We are not just our economies, we are societies. It requires conversations on human rights. There is so much we have in common with the European Union and Germany. Having lived in the European Union and being also a EU citizen – I have an Irish passport –, I know the importance of the European Union to Germany from a social perspective and also the concerns of Germany from a financial fiscal perspective. Canada has worked very collaboratively with Germany at the G7 and G20 on fiscal consolidation. An important part of this is the very clear reporting of overall deficit and debt levels between municipal, state, federal and supranational levels. We continue to be a fiscally very responsible partner.
We are not just our economies, we are societies.
There is such a rich set of dialogues going on. It is important that we don’t put all of this on trade. I personally don’t think that trade agreements can deliver everything, like integration. If globalization is only about trade, it will fail. If globalization is also about how we take care of each other and how we take care of the environment, including elements like development aid and helping other countries to develop a rule of law and an independent judiciary, to train police and military police, then it will work.
If globalization is only about trade, it will fail.
There are different styles of interaction with the current U.S. administration on the international level. We have seen the German chancellor Merkel dealing with President Trump in a typically sober manner, and the French President Macron being very charming at first. In comparison, the Canadian Prime Minister Justin Trudeau used more direct and maybe strict words after the unpleasant sequel of this year’s G7 summit in Quebec. To what extent has this approach altered Canada’s way of negotiating with the Trump administration?
Canada has a very simple philosophy which is that the United States first of all continues to be very important to Canada and always will be. It is our largest neighbor. Millions of Canadians share if not passports then family and business connections. The United States is of course the office of the President, it is also Congress, it is also Governors of states. They are incredibly powerful in the US system. For example, in ratifying the Paris Climate Change Agreement and supporting the members of that agreement we have reached out to the very active state and city level: In New York with both Governor Cuomo and the Mayor, in California with both the Governor and the Mayor of San Francisco. Canada will continue to pursue a multi-level strategy when it comes to engage the United States. Our British traditions in one sense will keep us very focused. There is an old British saying: Keep calm and carry on. We know who we are. We know what our values are. We are a multilingual, multiracial society that is very open to the world. That is challenging and requires constant dialogue with our citizens. It doesn’t mean we are immune to any of the problems with racism that exist in the world. The Prime Minister’s commitment to inclusion of women and of LGBTQ citizens and to the environment has been very well presented and will be continued by Prime Minister Trudeau whom I have the pleasure of serving.
There is an old British saying: Keep calm and carry on. We know who we are. We know what our values are. We are a multilingual, multiracial society that is very open to the world.