Less economic growth, job losses, lower wages and tax revenues — that's what a Canada-EU free trade on the verge of being ratified will bring, according to a new study.
The Council of Canadians think tank, which opposes the proposed pact, on Monday highlighted the study by Tufts University researchers Pierre Kohler and Servaas Storm that says the Comprehensive Economic and Trade Agreement "will lead not just to economic losses but also to rising unemployment and inequality."
The CETA deal will have, the study added, "negative implications for social cohesion in an already complex and volatile political context."
In a joint statement, Canadian Trade Minister Chrystia Freeland and European Commissioner for Trade Cecilia Malmstrom defended CETA, calling it "a progressive agreement that will set a new standard for international trade."
While recognizing that "clarifications are needed to allay (some) concerns," they renewed a commitment to sign the pact, scheduled in October, and implement it in early 2017.
The study was published on the eve of large demonstrations against trade liberalization held in Germany last Saturday.
According to its authors, the macroeconomic consequences of the planned trade deal between Canada and the 28-nation European Union are significant. By 2023, they warned, CETA will lead to about 230,000 jobs lost, mostly in the EU.
They also say CETA proponents have overemphasized the prospect of higher economic growth due to increased trade and investment, noting that those projections rely on full employment and no negative impact on income distribution.
Providing alternative projections using the UN Global Policy Model (GPM), the authors suggest implementing CETA would lead to larger government deficits in every EU country as government revenues plunge.
It would put downward pressure on wages in both Canada and the EU, resulting in foregone average annual earnings increases of $1,985 in Canada and between $353 and $1,488 in the EU depending on the country, according to the study.
As well, it is expected to divert trade within the EU bloc, benefiting Germany, France and Italy to the detriment of other EU nations.
In absolute terms, CETA would slash 0.5 percent off the EU's gross domestic product — the broad measure of the output of the economy — and 1.0 percent off Canada's GDP.

Among EU nations, Germany's hit, a loss of 0.37 percent, would be relatively mild, compared with France (-0.65 percent) and Italy (-0.78 percent).
"That's only the economic part," said Council of Canadians chair Maude Barlow.
"We haven't begun to quantify the damage to our laws, policies, and democracies through regulatory harmonization and corporate lawsuits challenging our environmental and social standards, not to mention attacks on farmers and municipalities."

Source: Arab News