CETA Could Damage Manitoba’s Economic Prospects: Report

Full report

by John Jacobs and Lynne Fernandez

A trade deal with the European Union (EU) that’s being negotiated behind closed doors today could damage Manitoba’s manufacturing sector, says a report by the Canadian Centre for Policy Alternatives’ (CCPA) Manitoba office.  CETA: Constraining Manitoba’s Economic Prospects and Policy Options authored by John Jacobs and Lynne Fernandez details the ways in which the Comprehensive Economic and Trade Agreement (CETA) could reinforce the province’s growing reliance on exports of primary commodities and imports of EU manufactured goods.  “The agreement could take away the province’s ability to promote cutting edge value-added industries” says the report’s co-author John Jacobs.

The report indicates that Northern Manitobans stand to lose millions of dollars in potential local job creation and business opportunities should the agreement allow multinational mining companies access to our resources under the terms the EU is demanding.

According to Lynne Fernandez “the EU is keen to get its hands on the provincial energy sectors and the Manitoba government has asked for exemptions for Manitoba Hydro, but ultimately the provincial government is not in the driver’s seat and we can’t be certain whether, for example, Hydro’s capacity to give preference to businesses and workers in Northern communities will be preserved.”

“For the first time provincial and municipal governments will be covered by an international trade agreement. This would tie the hands of provincial and municipal governments in unprecedented ways” says Jacobs.  According to the authors, “this agreement could prevent the use of between $5 to $8 billion in annual public purchases to give preference to local and provincial goods and services, such as Manitoba agricultural produce.”

The authors also flag the potential loss of policy sovereignty. Investors could have the ability to sue provincial and municipal governments for lost profits should government health, safety and environmental regulations limit the profitability of EU corporations. Under NAFTA’s favoured nation clause, many of the provisions of CETA will be extended to US and Mexican corporations.

Among the report’s key findings:

  • CETA first time provincial and municipal governments covered by an international trade agreement;
  • CETA curtails regional and local economic development options and advanced manufacturing;
  • CETA curtails capacity to derive benefits from mining and natural resources;
  • EU seeking to access provincial energy markets (Manitoba Hydro);
  • CETA would increase the costs of public services and curtail the ability of the province to deal with emerging issues such as climate change, economic volatility and new technologies;
  • Patent protection enforcement would make farming more expensive;
  • CETA would increase the costs of pharmaceutical drugs in Manitoba by up to $81million annually;
  • EU is pushing for its companies whose activities are harmful to public health and safety and the environment to be compensated if regulations reduce their potential profits;
  • CETA could expose provincial and municipal governments to litigation from foreign corporations.