CETA deal spells economic doom for the EU, new study warns

21 September 2016 - 12:00pm
Press release

EU-Canada trade deal CETA will lead to hundreds of thousands of lost jobs, lower wages for workers and will damage trade between EU countries, according to a new study.

The authors of ‘CETA Without Blinders’ warn that the deal, which was negotiated for five years in absolute secrecy between the EU and Canada, “will lead not just to economic losses but also to rising unemployment and inequality, with negative implications for social cohesion in an already complex and volatile political context”.

War on Want senior trade campaigner Mark Dearn said:

“Despite CETA’s potential impacts on jobs, climate change and the very basis of our legal system, the European Commission has abjectly failed to perform a thorough assessment of the deal. This new study shows CETA means economic disaster for the governments and people of Europe and comes as thousands protest in Brussels aganist this toxic deal.

In recent weeks, Labour MEPs have spoken out about their concerns for CETA, highlighting public services, workers’ rights and the investor-state dispute settlement (ISDS) ‘corporate court’ mechanism, which allows companies to sue countries for policies affecting their profits. The UK is particularly affected by ‘corporate courts’ as under CETA’s terms the UK is open to being sued for 20 years after Brexit.

The Labour MEPs' position reflects the decision taken by the European trade union movement at its 2015 Paris congress, specifically that it: “... opposes the CETA agreement, which does not fulfil our conditions notably in including ISDS, and we will continue forcefully to oppose any further steps towards its ratification.”

However, the European Commission continues to claim CETA is a model trade deal.

Dearn went on: “How can we trust European Commission spin when, after being told for many years that this is the model ‘progressive trade deal’, there are now frank admissions from MEPs that the deal jeopardises workers’ rights and public services, and that CETA’s ‘corporate court’ mechanism is not fit for purpose.

“If the European Commission truly wants a progressive EU-Canada trade deal, it must scrap CETA and think again - but this time with a spirit of transparency and with the full engagement of public interest groups and elected MPs.”

The study was carried out at Tufts University in the USA. Its key findings include:

  • CETA will lead to net losses in GDP and government revenues
  • CETA will lead to 230,000 lost jobs in CETA countries
  • CETA will lead to a reduction of the labour income share and to wage repression

 

Notes to editors

For further information and interviews, contact Mark Dearn on +44 7804 289680 or Ross Hemingway on +44 7983 550728

To access the UN Global Policy Model study “CETA Without Blinders: How Cutting ‘Trade Costs and More’ Will Cause Unemployment, Inequality and Welfare Losses”, visit: http://www.ase.tufts.edu/gdae/policy_research/ceta_simulations.html

For more information on the position of the European Trade Union Confederation, visit: https://www.etuc.org/documents/etuc-position-commissions-proposal-investment-court-system-ttip-and-ceta#.V-E_k_krKig

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