CETA - Not Much to Speak Of, But a Lot to Talk About

To hear the Cons tell it, the Canada Europe trade deal is Harper's crowning moment.   Coming in the midst of the Senate expenses fiasco, with Harper himself firmly mired in the Wright-Duffy-Harper scandal, it's perhaps understandable that the Cons are looking for something, anything they can crow about.

CETA, however, may fall far short of what the Tories would have us believe it means to Canada.   Already some who have pored over it figure Harper wasn't much of a negotiator; that the Euros got the better of him.   Meanwhile independent reports from the Royal Bank and Capital Economics are tossing a wet blanket over the deal.

"It's political so there's lots of hype around the deal," said David Madani, chief economist with the private-sector research firm Capital Economics in Toronto.

"Most people understand that Canada's trade with the EU (European Union) is small so it's not going to have a huge benefit. Assuming it is ratified, it'll benefit Canada but the benefit will be very small."

The government continues to quote a joint study on the impact, conducted five years ago, projecting a possible $12 billion boost to economic activity in Canada — $16 billion for the EU — and the creation of about 80,000 jobs.

RBC economist Laura Cooper says it is difficult to verify the claims, given the lack of details in what has been announced.

She concludes, in a five-page analysis issued to clients on Wednesday, that while there are potential benefits for the economy down the road, "there will be little noticeable economic impact for Canada over the short-term."

A big reason for tempering expectations, say the reports, is that current trade volumes between Canada and the EU are modest. In 2012, Canadian exports totalled about $463 billion, but only $41 billion went to the EU, so even a 20 per cent boost to the volume will be a modest increase in the overall economies of both.

As well, several key sectors may not be able to realize large gains from the deal, the reports say.

For instance, RBC points out that 45 per cent of Canadian exports to the European Union last year were related to resources. As most raw materials are already tariff free, the deal will make minimal difference, it concludes.

Madani says another mismatch is the auto sector, where Canada obtained preferential treatment to ship 100,000 vehicles across the Atlantic — more than tenfold current shipments — in exchange for dropping a 6.2 per cent tariff on EU cars.

The deal will neither lead to a Canadian auto bonanza nor disaster for domestic producers, he says, although consumers here might eventually save on imported Audis, BMWs and Mercedes Benzes.

In other words, Harper's boasting is mainly "small dick syndrome" although, given how little he has actually achieved over the past seven years, it still might actually be his crowning achievement.