I read an article on the BBC about why the Belgian province may sink the EU-Canada trade deal. Belgium’s government stats that it is likely
to block the deal due to fears that “it could lead to a flood of cheap imports.”
This relationship has a lot of influence on the United States because the
failure of this legislation, CETA, could throw a spanner on ongoing negotiations
for the US and Japan and can place some doubt on the post-Brexit Britain can
negotiate a favorable and speedy deal with Europe. This deal puts heavy
pressure on Canada as they are UK’s largest trading partner and puts them in an
“unexpected quandary” says Christopher Sand of the Canadian Studies at John
Hopkins University.
I found
this article very interesting because each week we have been able to build upon
the idea of free trade benefits both countries. I find this article very interesting
because in class we are not able to show ramifications of other counties negotiating
trade deals or even say Brexit happening. However, it still baffles me when the
article they state cheaper imports and make it sound like a bad thing. Belgian
is afraid that by opening their country to Canada and allowing cheaper imports
would harm and take away their manufacturing jobs.
Jon, an interesting article and one that I had seen on the news myself. I think that the Wallonian government when citing the impact on local beef and pork producers fail to account for the consumers in the region who will now be able to purchase beef and pork at a lower cost and thus move to a greater indifference curve. They also fail to recognise that in the long run all factors are mobile, as we have seen this week in the Heckscher-Ohlin model, which means that the labour force which was working in the industries that have been undercut by cheap Canadian imports will move to a different sector. This will cause increased specialization of labour in Belgium and should cause them to produce and export more in the industries in which they have a comparative advantage.
ReplyDeleteI agree with both of you that trade will benefit both countries and how the countries fail to see this. I also find it interesting to see how other countries think about negotiating trades as well. Do you think that the CETA should have all 28 countries vote unanimously, or, should their be a majority rules?
ReplyDeleteWhen you look at this from a political viewpoint Belgium would be worried about unemployment. The unemployed do not vote for those already in power, therefore Belgium would be worried about the cheap imports taking jobs away from the Belgium people
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