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ASSESS_CETA: Assessing the claimed benefits of the EU-Canada Trade Agreement (CETA)
[CETA: Ökonomische Bewertung der prognostizierten Effekte des EU-Kanada-Freihandelsabkommens]

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  • Raza, Werner G.
  • Tröster, Bernhard
  • von Arnim, Rudi

Abstract

In late 2016, a decision will be made by the Council of the European Union whether to launch the ratification process of the free trade agreement between the EU and Canada (CETA). The European Commission (EC) is promoting the agreement with the prospects of more trade, stronger economic relations and job creation. However, studies on the economic impact of CETA report only marginal effects on GDP of 0.03% to 0.08% for the whole of the EU. In other words, CETA is expected to generate a one-time income effect of around 20 EUR per EU citizen after a 10 years implementation period. Despite these small effects by CETA, it is worthwhile to question models and assumptions that stand behind these estimations and show neglected risks and adjustment costs. This task is highly relevant, given that the EC is stressing the innovative character of the agreement as it includes intensive regulatory cooperation and strengthens investor protection via the controversially discussed investor arbitration mechanism. CETA is therefore considered the blueprint of the future EU trade policy that focuses on new topics such as regulation, liberalization of public procurement and the promotion and protection of investment.

Suggested Citation

  • Raza, Werner G. & Tröster, Bernhard & von Arnim, Rudi, 2016. "ASSESS_CETA: Assessing the claimed benefits of the EU-Canada Trade Agreement (CETA) [CETA: Ökonomische Bewertung der prognostizierten Effekte des EU-Kanada-Freihandelsabkommens]," Research Reports 4/2016, Austrian Foundation for Development Research (ÖFSE).
    • Handle: RePEc:zbw:oefser:42016
    Note: Commissioned by the Chamber of Labour Vienna. Updated Final Report, 03 August 2016
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    1. John Beghin & Anne-Célia Disdier & Stéphan Marette & Frank Van Tongeren, 2017. "Welfare costs and benefits of non-tariff measures in trade: a conceptual framework and application," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 7, pages 119-138, World Scientific Publishing Co. Pte. Ltd..
    2. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, December.
    3. Raza, Werner & Taylor, Lance & Tröster, Bernhard & von Arnim, Rudi, 2016. "Modelling the impacts of trade on employment and development: A structuralist CGE-model for the analysis of TTIP and other trade agreements," Working Papers 57, Austrian Foundation for Development Research (ÖFSE).
    4. Werner Raza & Bernhard Tröster & Rudi von Arnim, 2016. "The blind spots of trade impact assessment: macroeconomic adjustment costs and the social costs of regulatory change," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 13(1), pages 87-102, April.
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