Wednesday, May 3, 2017

European trade deal gains “modest”

Canadian incomes will increase by about $220 per year when the free trade deal with the European Union comes into effect, says the Parliamentary budget officer.

He calls that gain “modest”.

Wheat will be the first agriculture export to make significant gains, he predicts.

Gains for other agriculture exports will come more slowly. The beef and pork sectors have been anticipating significant gains.

The report released Tuesday estimates the trade deal would have lifted Canada's overall economic output in 2015 by 0.4 per cent or $7.9 billion, had it been implemented at the time
Canadian exports of goods to the EU would have increased by $4 billion, services by $2.2 billion and investment by $3.1 billion, the analysis found.

"Starting from relatively low levels, exports of goods will increase by 9.3 per cent and services by 14 per cent,” the report predicts.

The PBO based its analysis on 2015 because projecting into the future would have been more difficult. It was also the most recent year for which a complete set of economic data was available.
Sectors including transport and motor vehicles, some metals and wheat will likely grow more quickly, the budget office predicted.

On the other hand, it also said some Canadian sectors will likely see slower growth under the agreement, including textiles, some machinery and manufactured goods as well as some dairy and agricultural products.