Harper takes on cheese lobby to win free trade with Europe

NAFTA was never like this. Instead of the anguished, existential debate over free trade with the U.S., the deal with Europe never broke out of the business pages during the long four years of negotiations. Fretting about cheese quotas just didn't capture the imagination the way that fretting about Canada's sovereign identity did.

Even so, on his trip earlier this month to Southeast Asia, Prime Minister Stephen Harper described free trade with Europe as "the most important priority" of his government.

It seemed like a surprising comment, given the competition for his attention: the deficit, the battle for Asian markets, the frustrating drive for new pipelines, the Senate, the throne speech — not to mention his sagging poll numbers.

Still, although we didn't know it at the time, Harper was in the throes of final negotiations with the European Union. The Europeans needed Canada less than Canada needed Europe — and Brussels would not sign without driving a bigger hole in Canada's protected dairy sector. 

Harper had to decide just how badly he wanted a deal. How much howling would he have to hear from the cheese industry if he buckled just a little and doubled the quota for tariff-free European cheese imports? And, if he didn't, wouldn't the wider business community howl just as loudly that his quest for new markets was going nowhere?

Shiploads of Camembert?

We know now that Harper wanted the deal badly enough. Evidently, some cries of woe from the cheese-makers would have to be tolerated in order to please the army of CEOs urging Harper to get on with it. They wanted him to get the deal done before the EU turned its attention to a much bigger one: free trade with the U.S.

• Quebec cheese makers furious over Euro trade deal

Besides that, in the grand scheme of things, the political impact of the cheese issue must have seemed greater than its real worth. It's not as though shiploads of ripe Camembert were converging on Canada's ports. Only four per cent of the cheese Canadians eat is imported. If that goes up a little, will the sky fall?

So, after protracted resistance, the Canadian negotiators were told to give a little — and the Europeans accepted. The increased quota will hardly look like a bonanza to the French brie lobby, but it's much better than nothing. Of such small breakthroughs are free trade agreements made.

The real deal — or Swiss cheese?

Next, the question is whether the new deal is really the sweeping, ambitious deal that was advertised, or turns out to be as full of holes as, well, Swiss cheese.

Proponents of the agreement have proclaimed that the agreement will usher in a bright new dawn for traders on both sides of the Atlantic: $12 billion will be added to Canada's gross domestic product! 80,000 new jobs will be created!

We'll see about that. Those estimates were made in 2007, on the assumption of a truly comprehensive agreement. So far, we know that the range of goods and services covered by the agreement is broad — but, if the cheese 
tradeoff is anything to go by, that doesn't mean that trade is truly free.

Perfect or not, the agreement will also face internal disputes on both sides. Will Canada's provinces stand in the way? And what about the challenge for the European Commission President, Jose Manuel Barroso? With 500 million people and 28 sovereign countries to bring on board, his task is no walk in the park.

So we're not there yet. But Harper's "most important priority" is now in sight. And, if the French Camembert fleet fails to appear, maybe the blow to Canada's cheese makers will seem like a price worth paying.