Canada and Free Markets

Oct. 23, 2013
A free trade deal between Canada and the European Union can bring immense benefits

Canada and the European Union are on track to ratify a free-trade deal in 2015. Leaders in both countries expect the deal to be approved without a lot of resistance. The deal, called CETA, would eliminate tariffs on goods and provide for greater access of services both ways across the Atlantic. Some regulatory dismantling would also occur. Free trade with less regulation in Canada and the EU – that's great news if you are a cheerleader for the free market.

The estimate is that this deal would increase the current EU-Canada trade volume of €80 billion (aprox $109 billion) a year by 23%. Consummation of CETA would also mean that Canada is the only Group of Eight nation to have preferential access to the US and Europe, the two biggest consumer markets in theworld.

The European Commission estimates that up to a quarter of the economic benefits will come from eliminating regulatory barriers to trade. Reducing barriers sounds like a terrible idea to protectionists or to uncompetitive industries, but it fosters competition, efficiencies, and in the end, results in economic gains for consumers.

There are those who would prefer that the protective barriers would continue. Canada's cheese industry is one such group. They state that Canada will lose its small, artisan local cheese makers as Europe's name-brand makers have easy access to their market. This is exactly the protectionist versus free market point. These small Canada cheese makers are not seeing the potential of access to a huge market; they fear that superior goods will take away market share.

The free market answer is to improve your quality and marketing and compete on a larger stage. If the local cheese makers truly produce an inferior product, why should they be protected from those who are better at their trade? The reality is most will probably improve their process, product and positioning, and in doing so be better entities because of this. That's the beauty of the free-market system; it pushes participants to new heights.

About the Author

Alan Beaulieu Blog | President

One of the country’s most informed economists, Alan Beaulieu is a principal of the ITR Economics where he serves as President. ITR predicts future economic trends with 94.7% accuracy rate and 60 years of correct calls. In his keynotes, Alan delivers clear, comprehensive action plans and tools for capitalizing on business cycle fluctuations and outperforming your competition--whether the economy is moving up, down, or in a recession.

Since 1990, he has been consulting with companies throughout the US, Europe, and Asia on how to forecast, plan, and increase their profits based on business cycle trend analysis. Alan is also the Senior Economic Advisor to NAW, Contributing Editor for INDUSTRYWEEK, and the Chief Economist for HARDI.

Alan is co-author, along with his brother Brian, of the book MAKE YOUR MOVE, and has written numerous articles on economic analysis. He makes up to 150 appearances each year, and his keynotes and seminars have helped thousands of business owners and executives capitalize on emerging trends. 

Prior to joining ITR Economics, Alan was a principal in a steel fabrication company and also in a software development company.

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