Connect with us

Canada

European integrity at risk from slack Canadian standards?

SHARE:

Published

on

We use your sign-up to provide content in ways you've consented to and to improve our understanding of you. You can unsubscribe at any time.

Two years into the Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU, the arrangement has not proven to be as fruitful for either side as previously predicted. While the treaty hasn’t yet formally entered into effect, it’s been provisionally applied since September 2017, eliminating 98% of tariffs between the two parties.

Canadian farmers have been left dismayed by the stringent health standards imposed upon imports by the bloc, while their French counterparts fear the threat of unfair overseas competition. Meanwhile, concerns are rising that, thanks to Canada’s relatively lax criteria for foreign investment, CETA gives Chinese investors a backdoor to European markets at a time when the EU is committed to rigorously screening investment in the bloc.

CETA falling short

The Canadian cattle rearing industry had hoped that the removal of tariffs between Ottawa and Brussels would lead to massive export deals, with one prominent observer anticipating Canadian beef sales to the EU surpassing $600 million annually. However, such prosperity has not materialised; in the year the treaty was first brought into force, the EU accounted for only 2.3% of Canadian meat exports. Last year, that figure rose only incrementally to 3.1%, or a mere $12.7 million – just 2% of the projected total.

The reasons for that shortfall are believed to lie within the disparity between Canadian and EU food standards. The EU does not allow for the use of growth hormones or antibiotics, meaning that Canadian operators keen to take advantage of CETA have been forced to change their rearing methods. Furthermore, they must also have those methods certified by a qualified veterinarian; the cost of doing so is not only prohibitive, but a dearth of capable vets has also slowed progress.

Concerns across the pond

Advertisement

Meanwhile, CETA has not been warmly received in Europe, either. French farmers vandalised two government offices in Toulouse in August of this year, dumping tonnes of manure outside of one and blockading another with concrete slabs. Their angry actions came after the country’s leading agricultural trade union invited 10 deputies of their local region to debate the CETA regulations, only to receive not a single response from any of them. Despite the opposition, French MPs voted to ratify the agreement earlier in 2019.

While the farmers’ concerns were rooted mainly in economic grounds, activists have expressed their own doubts about how the deal might affect the integrity of EU food and environmental standards. The use of bone meal and antibiotics in animal feed has been prohibited in the European bloc since 2004, in the wake of the mad cow disease outbreak, but these additives remain widespread in Canada. Critics say that CETA could serve as the thin end of a wedge, allowing irresponsible processes and substandard goods to infiltrate the European market.

Canadian acceptance of problematic investors underlines dangers

The agricultural sector’s concerns are part of a broader problem: Canadian regulation is often not in lockstep with European regulation, and the free trade agreement means that what would normally be Canadian domestic issues have ripple effects in the European bloc. For one thing, Ottawa has sometimes left the door open to troublesome foreign investors like Indonesian paper, pulp and palm oil conglomerate Sinar Mas.

Controlled by the powerful Indonesian-Chinese Widjaja family, Sinar Mas has repeatedly flaunted environmental norms and been implicated in illegal deforestation, leading to international organisations like Greenpeace, the WWF and the Rainforest Alliance cutting ties with the firm and warning investors to steer clear. Making matters worse, Sinar Mas has previously received loans from the China Development Bank, a key cog in China’s Belt and Road initiative.

Over the past decade, Sinar Mas, through Paper Excellence, has been quietly but methodically expanding its footprint in Canada, purchasing as many as five mills in the country. This has contributed to the country’s growing paper and forest products exports, which stood at $35.7 billion in 2017. However, almost all of Paper Excellence’s mills have come under scrutiny; one facility in British Columbia was found to fall significantly short of health and safety standards in 2016, while two others were fined a cumulative $685,000 in 2018 for violating the conditions of their permits.

Another still – Northern Pulp in Nova Scotia – has drawn substantial criticism over proposed plans to build a 15km pipeline with the express purpose of dumping effluent into a picturesque and biodiverse strait. The Northern Pulp plant has already received more than its fair share of pushback from environmentalists and local activists— it was fined $225,000 for a toxic leak in 2014, and local residents have complained that it’s permanently raised water levels, spewed foul-smelling fumes across the region and dumped mercury in a nearby harbour.

Worryingly, Canadian premier Justin Trudeau has delegated regulation of the proposed pipeline to provincial lawmakers—particularly problematic given that Nova Scotia has a vested financial interest in the pipeline and apparently made a secret agreement with Northern Pulp.

European policies endangered by commerce

Canada’s willingness to embrace investment from a company with such a chequered environmental reputation bolsters fears that CETA opens the EU up to substandard business practices. The EU is increasingly making an effort to screen foreign investment in the European bloc to make sure it doesn’t undermine European interests, with a particular focus on China. Agreements like CETA, however, throw a wrench in Brussels’s attempts to crack down on problematic foreign investment.

CETA’s backers have focused on the supposed economic benefits of the deal. Two years in, however, examples like the lacklustre exports of Canadian beef suggest that it hasn’t been terribly how effective in this regard. Meanwhile, it’s opened the European bloc up to a whole host of problems stemming from the gap between the European and North American regulatory regimes.

Share this article:

EU Reporter publishes articles from a variety of outside sources which express a wide range of viewpoints. The positions taken in these articles are not necessarily those of EU Reporter.

Trending