Canada’s Trade Deficit with the EU Doubles

On Wednesday’s Lang & O’Leary Exchange (video), I debunked the claim that the trade deal between Canada and the European Union (EU) will create 80,000 Canadian jobs. The conservative panelists did not even try to defend this figure.

As Jim Stanford has previously explained, the government’s model assumes full employment and projects higher output based on improved productivity from free trade. It is disingenuous to then translate that additional output back into extra employment.

Another point I made on Lang & O’Leary and on Thursday’s CTV National News (video) is that, in the first eight months of this year, Canada ran a trade deficit of $14 billion with the EU.

That already exceeds the total annual deficits of $11.9 billion in 2012 and $12.0 billion in 2011. In other words, our trade deficit with the EU has jumped from $1 billion per month to almost $2 billion per month this year.

If free trade amplifies existing export and import flows, the result will be an even larger Canada-EU trade deficit. And unless you assume full employment, a larger trade deficit with the EU would mean a loss of output and jobs in Canada.

Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.

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