Cheese and whine

Canadian PM Stephen Harper was in Brussels today to announce that Canada and the EU have agreed on a free trade deal -- details here.  Final terms are still to be worked out, but the deal will cover a wide range of goods and services.  With the EU poised to start negotiations on a much bigger free trade deal with the United States, today's announcement eases the Harper government's fears that the long-running negotiations might get shelved.

In true Canadian fashion, initial responses to the deal have focused on the probable losers.  The most wide-ranging condemnation has come from the always negative Maude Barlow of the "Council of Canadians", who has said that there is no case to be made for any such deal.  Jim Stanford, the thoughtful economist at trade union Unifor, has estimated that the deal could cost Canada up to 150,000 jobs, in sharp contrast to the government's own claim that it could produce 80-100,000 new ones.

Then there are the specific industries that could be severely affected.  One is wine, a particularly important sector of the economy hereabouts, where a switch from an ad valorem tariff to a flat rate could make European wines more competitive at the higher price points.  Potentially even more seriously affected is the cheese industry, which faces a more-than-doubling of the quota assigned to European producers.  Cheese makers in Quebec seem to be particularly alarmed.

It's never easy to predict exactly how a free trade deal will play out, but there's one factor worth keeping in mind here:  Canadians are world-class cheapskates*.  Here in the Niagara region, a key feature of every newscast is a report of how long the lines are at the three bridges into the US.  People are happy to line up for hours to save a few dollars on their weekly grocery shop, to the despair of local retailers.

Niagara is also wine country, with upwards of sixty producers in a smallish geographical area.  If you go to a comparable area in Europe -- the Loire Valley in France, for example, or the Veneto in Italy -- you find that local stores and restaurants not only stock very few wines from outside the country, the don't even stock many from outside the immediate area.  In Niagara, by contrast, local product is still heavily outgunned on store shelves and on menus by imported wines, despite the best efforts of the provincial liquor board (and the rising quality of the wines themselves).

Whether it's in deciding where to shop or deciding which wine to buy, most Canadians choose to ignore the fact that "shopping foreign" is putting their neighbours' livelihoods at risk, and always go for the cheapest product.  It's a difficult mindset to overcome, and if I were a cheese or wine maker, I'd be worried too.

* Old Florida joke:
Q: What's the difference between a canoe and a Canadian?
A: A canoe tips.