Heres why European companies may do much better than Canadian ones under

OTTAWA — European exporters will save about three times the amount of duty payments compared with their Canadian counterparts in a landmark free-trade agreement, The Canadian Press has learned.[np_storybar title=”Here’s who wins and loses in the Canada-EU free trade deal” link=”https://business.financialpost.com/2013/10/18/canada-eu-trade-deal-winners-losers/”%5DEvery free trade deal has winners and losers, and the much-anticipated Canada-European Union is no exception. Lee Berthiaume takes a deeper look. [/np_storybar]Sources say European Union exporters will save more than $670 million annually in duty payments compared with about $225 million annually for Canada’s.That apparent win for European exporters is contained in an internal EU analysis of its sweeping agreement-in-principle with Canada, sources say.The figures emerged Tuesday as Prime Minister Stephen Harper rose in the House of Commons to table additional details of the Canada-EU trade pact.“The free-trade agreement between Canada and Europe is the most important signed by our country. It will lead to jobs and opportunities for families, workers, companies throughout the country,” the prime minister said.“It is a historic moment.”International Trade Minister Ed Fast called the 26-page document from Harper a “detailed summary” of the trade agreement with the EU.However, it did not contain the same detailed tariff prediction making the rounds internally in Europe.Fast rejected critics of the government who have called for the release of the full text so it can be properly judged.“Just one more example of the openness that has characterized this entire process, we’ll be tabling a very detailed summary of these outcomes in the House of Commons,” Fast said earlier Tuesday in a speech in Ottawa.In an interview, Fast said the benefits of the agreement “go far beyond tariff elimination.” Just as important, he added, is the elimination of non-tariff barriers that have bedevilled Canadian firms trying to do business in Europe.He also said the federal government will more than make up for the lost $670 million in tariff revenues.We expect that the gains on the economy will more than outstrip the tariff losses“We expect that the gains on the economy will more than outstrip the tariff losses. At the end of the day, this will be a net fiscal benefit to Canada,” he said.“Our exporters will benefit, our importers will benefit, our workers will benefit and of course our consumers will benefit. This is a win, win, win, win agreement for Canada.”Part of the reason for the gap on tariff elimination is that Europe currently exports more to Canada than the reverse, meaning EU exporters currently pay more duties. A Canadian official noted that the deal will also open up previously closed markets to Canadian exporters, particularly for beef and pork producers.Jayson Myers of the Canadian Manufacturers and Exporters industry group says another factor may be the mix of exports from Canada, but that his members, including smaller firms, are anxiously eyeing the large and lucrative European market. He says the deal will open up plenty of opportunity for exporters, but firms must be prepared to jump in.“We could have zero economic benefits if companies don’t take advantage of the openings. I think they will,” he said.Harper signed the agreement-in-principle in a splashy photo-op in Brussels earlier this month, saying it would create up to 80,000 jobs — although some economists, particularly those attached to labour groups, say the figure is not credible.The deal is touted as easing the flow of goods and services between Canada and the European Union, including labour, autos, beef and wine.It will take 18 to 24 months for the deal to be ratified by both sides.Fast said when the deal is concluded it will be tabled in the Commons and the government will issue implementation legislation, after which the deal will be debated.The text itself will have to “scrubbed” by lawyers, and both Canada and Europe will have to get approval of the deal from its respective constituencies, the Canadian provinces and territories and Europe’s 28 countries.The government document, “Technical Summary of Final Negotiated Outcomes,” contains bullet-point summaries of the seven major sections of the Comprehensive Economic and Trade Agreement or CETA.They include agricultural and non-agricultural goods, services and investment, government procurement, intellectual property and dispute settlement.We still have no text, so there is no way to trust the Harper government’s exaggerated claims about this dealSome of the details were previously released Oct. 18 in Brussels when Harper signed the agreement-in-principle with European Commission president Jose Manuel Barroso.Stuart Trew, a trade specialist with the Council of Canadians, said Harper’s tabling of documents Tuesday was not worth the hype.“There is little new information in this CETA summary and we still have no text, so there is no way to trust the Harper government’s exaggerated claims about this deal,” said Trew.“For an agreement of this scope and permanence that was negotiated in secret, there should be a way to review, revise or reject any part of it before it becomes law.” read more

RBC Capital Markets predicts further escalation of platinum price due to South

first_imgRBC Capital Markets has released a research report that concludes that 2008 will see the price of platinum continue to soar as a result of a production bottleneck in South Africa. Platinum prices have surged over $2,000, up 135% since the beginning of 2005, recently reaching a seven-week high amid concerns over power supply difficulties in South Africa which have caused widespread disruption to production.  Eskom, South Africa’s power utility, has inadequately invested in generation capacity, the impact of which could be felt for the next four to five years, or longer.“Given the clear risk that power supply may be constrained, will junior producers, who don’t have the capital to set up smelting operations, be able to sell their concentrate?” asks Leon Esterhuizen, Analyst, Global Mining Research at RBC Capital Markets. “The juniors may well be able to mine, but the majors would have to get increased power allocation in order to smelt and treat more third party material. This then becomes the ultimate bottleneck that threatens to create an environment where metal prices could increase significantly.“The massive shortage of skills in South Africa is also a problem for producers.  Competition to attract and retain good people has already caused labour costs to escalate by at least 15% per annum and the problem gets worse as new entrants come on stream and start looking for labour and skilled managers.“Compounding the problem of reduced output is the increasing demand for platinum by the jewellery sector and the automobile industry, which uses the metal in catalytic converters for cleaning tailpipe emissions.“Further price pressures come from investors who are buying platinum metal-backed exchange-traded funds (ETFs). Platinum ETFs pose a real threat as they may put the market in an ever growing deficit.“To ensure longer term sustainability of the industry and the market as a whole, there has to be faster expansion of production,” says Esterhuizen. “The junior companies best positioned to take part in this are the ones that are already in production, or will be so shortly, and those that will be expanding output and have, in the case of the juniors, a valid offtake agreement in place” says Esterhuizen.RBC Capital Markets hosted its inaugural Platinum Group Metals Conference on May 16 in London. The conference brought together the senior management of the world’s largest platinum producers to speak about the opportunities and challenges they face. Speakers included: Eastern Platinum, Mvelaphanda Resources, African Rainbow Minerals, Braemore Resources, Platmin, Platinum Australia, Platinum Group Metals, Ridge Mining and Wesizwe Platinum.The conference contents are available via audio-only webcast at http://www.rbccm.com/last_img read more