New CAW film about the economics of CETA

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The CAW has just released a 20-minute video featuring none other than yours truly giving a short lecture about the economics of the proposed Canada-EU free trade agreement (a.k.a. CETA).

This link takes you to the film, which can be downloaded for free and shown at information meetings or any other organizing events.

The lecture basically covers the same terrain as my study last October published by the CCPA, which considered the likely economic and employment effects of the proposed deal, without the benefit of the usual CGE modeling assumptions that the Walrasian hired guns used in their report for the EU and Canadian governments.

The simple math confirms that the Canada-EU trade deficit (already honking big, both in dollars and in terms of the qualitative mismatch: as usual, Canada exports mostly resources and imports mostly sophisticated high-tech value-added products) will get much bigger under free trade. This is pre-determined given that our imports from Europe are already almost $20 billion larger than our exports, along with the fact that our average bilateral tariff is more than half-again larger than Europe's (hence tariff elimination can only spur their exports more than ours). The government study confirms that the bilateral trade deficit will widen. Yet with the usual Walrasian alchemy they turn that water into the wine of higher GDP, thanks to assumptions like balanced aggregate trade, full employment, uniform factor pricing, and the infamous "representative household."

This video attempts to dissect the Walrasian assumptions in layperson's terms, and provide some more grounded counter-arguments to assist our grass-roots campaigners in the coming battle to stop the deal. It is illustrated with entertaining animations from the wonderful Mike Constable. Special thanks also to Angelo diCaro from the CAW Communications department who conceived, planned, and produced the whole thing, and Bill Moffat and his team at Avard video for the filming and editing.

This article was first posted on The Progressive Economics Forum.

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