The agreement in principle of a free trade deal between Canada and the European
Union (EU) sets a new gold standard for international trade agreements. The Comprehensive Economic and Trade Agreement (CETA) promotes the free movement of goods, services, investment and labour. It also includes areas of economic engagement that have never been covered by previous international trade agreements such as intellectual property and government procurement.
Greece as a member of the European Union is in a privileged position to take advantage of this remarkable economic opportunity – one which is a building block of the 21st century global economy. Indeed, CETA can provide Greece with a foundation to further develop its economic relationship with Canada and contribute towards expanding trade, attracting investment, creating jobs and growing the Greek economy.
The new global economy rests on three pillars: globalization, trade liberalization and the information technology and communications revolution. Globalization has melted national borders. Free trade has enhanced economic integration. The information technology revolution has made geography and time irrelevant.
Why should Greece care about CETA at a time when it is facing major economic problems such as its fiscal challenges, high unemployment and economic stagnation? International trade can be a driver for growing the Greek economy, increasing government revenues, creating new job opportunities, attracting foreign investment and know-how and creating new revenue streams to support social programs.
Greece and Canada have a long and amicable history of working together on social, cultural, political and economic issues. The two share a strong bond that goes back many generations. Canadians grow up in their schools and universities learning about Greece and its glorious past. They are grateful that their democratic institutions and the practice of democracy were invented in Greece. Canadians speak eloquently about the contributions of ancient Greece to western civilization that endowed the world with a cultural legacy in the arts, the sciences, medicine, architecture, literature, drama and many other fields of human endeavor.
Canada also has a contemporary link to Greece. For many generations, Greeks have arrived in Canada as immigrants. These Greeks of the diaspora have a significant presence in Canada. At the present time there are in excess of a quarter of a million Canadians of Greek heritage that live and work and raise their families in Canada. Greek Canadians are an important economic bridge and a strategic economic asset linking these two countries.
I believe the CETA could not have come at a better time for Greece as it moves beyond its austerity program and focuses on growing the national economy.
International trade as a model for economic growth has been a recognized field of economic science for nearly two centuries. David Ricardo in 1817 was the first economist to propose international trade as a tool for economic prosperity. Since that time many other economists have made important academic contributions to our understanding of international trade and have refined international trade theory.
Canada is a good example of a country whose domestic economy has benefitted by engaging in international commerce. Indeed, though its population is relatively small, Canada has one of the highest standards of living in the world through its engagement with global commerce from its earliest days as a nation, and is one of the few countries that came out of the recent global financial crisis virtually unscathed.
Canada’s economic prosperity and standard of living is disanalogous with the relative small size of its population. It has achieved this outstanding standard of economic performance by actively engaging in international trade. Canada’s economic policy model embraces reaching outward through international trade in order to create in the domestic economy, jobs, incomes and an accelerated level of national economic growth.
If Canada can use international trade to fuel its economic prosperity so can Greece. The list of products where Greece stands to gain from the CETA is both long and diverse, including plastics, chemicals, tools, appliances, iron and steel products, agricultural products, dairy products, wines and spirits, ceramic and glassware, cosmetics and jewelry. This is the traditional list of Greek exports where Greece has a competitive advantage and an internationally recognized brand. This trade agreement also provides Greece with new opportunities for trade with Canada in the new sectors of the economy such as international services, information technology programs and software and opens the door for Greek businesses to bid for Canadian government contracts.
Greek businesspeople, entrepreneurs and ship owners have been successful international traders for a very long time. The names of the brothers Evangelos and Constantine Zappas, Yannis Varvakis, Emmanuel Benakis, Aristotle Onassis and Stavros Niarchos come to mind. We need to nurture the next generation of Greek entrepreneurs to attain even greater heights in economic outreach. This will permit a new generation of Greek business people to contribute to the economic success stories of modern Greece.
In the new economy success depends on our smarts, our global mindset and our productive enterprise. Global engagement through international trade is the wave of the future and the defining feature of the new economy.
A free trade agreement is simply an economic opportunity. It is not a guarantee of economic success. It opens the door for enhanced trade opportunities with another country in this case –Canada—one of the world’s most coveted export destinations. What will transform this economic opportunity into a business success story will be the vision and smarts of Greek entrepreneurs and the competitiveness of Greek products and services in terms of quality and price.
At the end of the day, Greece’s exports will be granted unrestricted and preferential access to the Canadian domestic market. One of the most lucrative consumer markets in the world. The removal of the economic burden of tariffs will make Greek exports even more competitive in Canada. In fact, CETA offers an added bonus. Since Canada is a member of the North American Free Trade Agreement (NAFTA), Greek products will have access to the whole north American market that includes the USA and Mexico.
In short, this trade agreement allows us to start writing a new chapter in the modern economic history of Greece. It allows us to adopt international trade as a strategic tool for Greece’s economic development. An economic development plan that embraces expanding Greek exports, growing the domestic economy, creating new job opportunities for young men and women in Greece and attracting foreign direct investment from Canada.
* Constantine Passaris is a Professor of Economics and an Onassis Foundation Fellow at the University of New Brunswick in Canada.