European View

A quick “yes” for the EU-Canada free trade agreement

by Paolo Bricco

24 Exclusive content for IT24

We need the European Union. What we don't need is a European Tower of Babel where everything must be voted on hundreds of times. The European Union, undermined by the possibility of Brexit and by immigration waves, has to make a decision -- at least -- regarding economic and trade policies. The EU can be a slow and rusty bandwagon; or it can try to be a fast and agile car.

For Italian manufacturing and for that of the whole continent, the natural challenge now is globalization, in the well-tempered version of free trade areas ruled through mechanisms aimed at reducing asymmetries and guaranteeing a free and fair competition. The first test is the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU.

The CETA, based on the abolition of 99% of custom duties, is not just a way for many European – and especially Italian – products to access the North American market. The CETA is also – in this era marred by community weaknesses and frailties – the perfect occasion to demonstrate that the EU (meaning its institutions and political elites, but also its communities and citizens) is able to trace a straight line towards the result that matters.

The problem is this: does it need to be approved by the European Union, or does it also need the ratification by all the 38 – yes, thirty-eight – Parliaments of the 28 member states? The Italian government did well by judging the first version correct from a juridical point of view and crucial from the political and economic ones. Through an innovative and disruptive choice, our government suggested to the Commission the idea of an Italian support to the non-mixed nature of the CETA.

If this suggestion were accepted, which has already obtained the approval of the Trade Commissioner Cecilia Malmström, the free trade agreement between the EU and Canada could be voted and ratified by a majority within the Commission and then the European Parliament.

And so, for a routine commercial agreement of free trading that doesn't introduce any regulatory indecency and does not have to reconcile any particular diverging interests, we could move on without falling in the trap of the ratification by 38 national parliaments.

The economic advantages would be significant, also thanks to the similarities and bonds between our country and Canada, whose prosperity is based on work and on the talent of our emigrants and their children.

In 2015, Italy's exports to Canada reached €3.7 billion, with an increase by 14% compared to 2014; the growth accumulated since 2007 (the last year before the economic crisis) has been equal to 32%. There are entire sectors that can only benefit from free trading.

It is enough to think about the room for improvement for Italy's food sector that in 2015 has already exported to Canada goods for €691 million according to the office studies of Federalimentare, with an increase by 8.2% compared to 2014 and an accumulated growth since 2007 by 60%.

Therefore, the CETA is the first test. The next one, even more important, will be the TTIP (the free trade agreement with the US). A crucial lifeline extended towards the future that is currently lacerated by Donald Trump's ultra-protectionist ideas and Hillary Clinton's cooling regarding this kind of treaties. And also, within a Europe animated by populism and separatist trends, by the sudden hesitation of France and Germany.