Just in time Canada is negotiating a closer relationship with the European Union (EU). As wealth and influence flow from the United States (US) to China and the Middle East and the US Empire begins to lose its supremacy as the world’s sole super-power, Canada must explore it’s options and find other partners to ensure our future prosperity.
The US under President George W. Bush’s administration has became corrupted by its massive military power, financial fraud, waste of resources and greed. The Republicans under President Bush inherited a US$236 billion surplus, low inflation and a booming economy from the Clinton administration. That’s all gone in just eight years—squandered by financing two disastrous wars with loans from abroad and printing money like drunken sailors and cutting taxes for the richest Americans.
While President Bush and his puppet master, Vice-president Dick Cheney waged war for control of foreign oil, they have virtually destroyed the US economy. The US deficit stands at US$407 billion and growing; spending has risen 16 per cent and military spending is up 50 per cent, including wars in Afghanistan and Iraq costing US$1 trillion. The size of government under President Bush has grown more than under any president since Johnson’s Great Society and Roosevelt’s New Deal.
Canada sends about 80 per cent of its exports to the US, representing about 60 per cent of our GDP. However, Senator Barack Obama seems poised to win the presidency on Nov. 4 and has committed to renegotiate the North American Free Trade Agreement (NAFTA) and that may not be good news for Canada.
The European Union is one of Canada’s oldest and closest partners. The relationship between Canada and the EU dates back to 1976 when a Framework Agreement was signed with what was then the EC, and is the EU’s oldest formal relationship with any industrialized country. This relationship has evolved over the years to become a strategic partnership.
Canada and the EU share common values of the most fundamental nature, and have enjoyed close historical and cultural ties. This is evidenced by the increasing frequency with which they vote together in international organizations—sometimes over 90 per cent of the time during sessions of the UN General Assembly—a clear demonstration of like-mindedness and shared belief in international multilateralism.
Canada and the EU already work closely together on many global challenges such as membership in NATO, climate change, energy and security and stability throughout the world. This co-operation encompasses a broad spectrum from research into alternative energy sources to providing police training in Afghanistan.
The EU, with a population of 500 million, is Canada's second-largest trading partner. In 2006 two-way merchandise trade between Canada and the EU was about $78 billion while two-way investment reached $263 billion. Not very significant figures when you consider the $626 billion in our two-way merchandise trade with the US and $497 billion in two-way investment.
Reducing trade barriers and liberalizing trade services would produce “gains” of about $22.5 billion for the EU and about $16 billion for Canada up until 2014, according to a joint Canada-EU study published on Oct. 16. Measured by GDP, Canada would gain the most, with a 0.8 per cent lift compared to 0.1 per cent for the EU.
Unlike NAFTA, a Canada-EU trade agreement would allow for Canadian and European workers to work in each other’s regions and allow for EU and Canadian companies to bid on government procurements on both sides of the Atlantic.
Full negotiations between Canada and the EU are expected to begin next year, with the launch of the deal coming as early as 2010.
Canada as a conduit between the world’s two greatest free-trade unions provides a seductive image.