Canada Calling: Parliament Approves Canada-Israel Free-Trade Deal

By Dirlik, John | Washington Report on Middle East Affairs, May 31, 1997 | Go to article overview

Canada Calling: Parliament Approves Canada-Israel Free-Trade Deal


Dirlik, John, Washington Report on Middle East Affairs


Canada Calling: Parliament Approves Canada-Israel Free-Trade Deal

Despite objections from Arab-Canadian groups and after more than two years of negotiations, Canada and Israel signed a long-awaited free-trade agreement that came into effect Jan. 1, 1997. It is Canada's first such agreement with a country outside North America.

One of the main supporters of the Canada-Israel Free Trade Agreement (CIFTA) was Canadian Minister of International Trade Art Eggleton, who argued that Canadian manufacturers have been at a disadvantage because of the free-trade deals Israel enjoys with the United States and the European Union. Pointing out that some Canadian companies have moved their manufacturing facilities to the U.S. just to benefit from the Israel-U.S. Free Trade deal, Eggleton defended CIFTA by saying it would restore a "level playing field" for Canadian businesses.

By eliminating 20 percent tariffs on industrial products, the CIFTA is expected to boost bilateral trade between Canada and Israel to a billion dollars a year -- three times the current amount.

Supporters argued that the deal would benefit Palestinians as well, after Israeli Trade Minister Natan Sharansky promised that his country would extend to the Palestinian Authority the same provisions contained in the Canada-Israel deal.

Although supporters of CIFTA stressed its economic dividends, this factor was downplayed by other observers. Israel is a "minor trading partner" for Canada and because of that "CIFTA is relatively unremarkable," said economics professor Atif Kubursi. "Far more important than the economics of the agreement are the symbols and the signals it sends," he said.

Kubursi pointed out that when Canada embarked on free-trade negotiations with Israel two years ago, Yitzhak Rabin was prime minister and "the peace process had some genuine momentum." But a new Israeli government "with a very different attitude" was now in power. "Settlements increase daily and bypass roads create new facts on the ground. Against this bleak picture, the implementation of this agreement at this time is a slap in the faces of Palestinians and of other Arabs. It is a reward for intransigence."

In an article published by Canada's leading daily, the Globe and Mail, Kubursi dismissed the argument that CIFTA would help the Palestinians. "Far more beneficial to the Palestinians than a free-trade agreement would be concerted international pressure on Israel to end its ruinous border closings and trade blockades of the Palestinian territories," he wrote. "These closings drain $6 million a day from the Palestinian economy, which is now more impoverished than at any other time since the Israeli occupation began in 1967."

The National Council on Canada-Arab Relations also denounced the timing of CIFTA and made a number of recommendations. Addressing hearings held by the Committee on Foreign Affairs and International Trade, the Arab lobby group criticized the lack of any linkage with respect for human rights, as the free-trade agreement with the European Union contains.

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