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Businesses rallying around Canada-EU free trade agreement

The Chamber of Commerce is holding a Canada-EU Forum today in Gatineau, Quebec to rally the troops behind Canada-European Union free trade negotiations. Then at 8 p.m. Trade Minister Van Loan will try to form an entire speech about the agreement for the group. “This is good for Canada” might make the dailies, Mr. Van Loan, but from the sounds of things it won’t cut it for Canada’s free trading business elite. It’s certainly not enough for the rest of us watching you sell Canada down the St. Lawrence River at the request of a more organized European business lobby.

According to Canada’s chief negotiator, Steve Verheul, business awareness about the deal is still low in Canada, and there is little concrete input from Canadian businesses on what barriers to trade and investment our negotiators should be trying to dismantle in Europe. (High profile examples currently include environmental certification programs and GMO bans in the EU — good things that trade negotiators call “Technical Barriers to Trade”.) This would be despite a decade-old Canada-Europe Roundtable for Business campaign for trans-Atlantic free trade.

On the other side of the pond, however, European business groups know perfectly well what kinds of policy changes they’d like to see in Canada. It’s clear from the detailed and aggressive demands on services and intellectual property rights in the draft of the Comprehensive Economic and Trade Agreement (CETA) leaked by the Trade Justice Network last week. It’s even clearer in the European Services Forum report on EU services companies’ priorities for the negotiations.

The ESF and BUSINESSEUROPE, whose president Jürgen Thumann addressed the Chamber of Commerce event this morning in Gatineau, have privileged access to EU trade negotiations and negotiators, according to Corporate Europe Observatory. The open-door policy at the European Commission means that business priorities are often included word for word in European trade agreements.

For example, the ESF would like Canada to get rid of foreign investment reviews:

“ESF members call for the removal of the required approval by the responsible minister for all direct acquisition of Canadian businesses above a certain amount of asset. As a question of principle, ESF also calls for the removal of all remaining equity caps that prevent EU Businesses to fully control their investments in Canada. Similarly, ESF looks for the complete removal, at least on a progressive basis, of nationality or residency requirements that still exist in many Canadian provinces in many sectors for the companies’ directors or members of the board. These requirements seriously hamper investments or proper business management of EU operations in Canada.”

… and foreign ownership rules on telecommunications:

“Canada must remove the ceilings on foreign equity participation (direct, indirect and by shareholder. Residency requirement must be removed or seriously reduced (as of today according to our intelligence, at least 80% of the members of the board of directors of facilities-based telecommunications service suppliers must be Canadian). ESF welcomes the recent announcement by Canadian authorities to open up to venture capital and FDI in the satellites and telecommunications sector and encourage them to bind the new reform into the EU-Canada FTA as a strong invitation to EU investors from that sector to participate to the development of the digital economy strategy.”

… and Canada’s better-than-most banking regulations:

“…Full service bank branches should be allowed to accept deposit without any limits from any depositors. Discriminatory citizenship/residency requirement for at least one half of the directors of federally regulated institutions should be removed, as well as the requirement according to which federally regulated financial institutions having capital in excess of $1 Billion must have 35% of their voting shares dispersed among many shareholders and must be listed on a Canadian stock exchange within three years of having reached that threshold. Commercial presence requirements in many provinces to supply cross-border asset management, advisory and auxiliary financial services should be removed, as well as the residency requirements or limits imposed to the Mutual Funds which offer securities.”

In order, the ESF priorities for the CETA negotiations are:

1. Negotiations on services and investment through the negative list approach,
2. Removal of all equity caps that may remain in Canada,
3. Removal of all nationality or residency requirement of members of executive boards of branches, subsidiaries and joint-ventures,
4. Improvement of intra-provinces movement of workers,
5. Negotiations of Mutual Recognition Agreements of diplomas and qualifications in professional services, starting with architectural services, aiming at legally binding instruments,
6. Setting up of regulatory cooperation dialogues in services sectors like financial services, telecommunication services, etc., involving all relevant regulatory bodies,
7. Settling up of the case on postal services that currently threats the eviction out of business of European express delivery companies,
8. Commitment of opening up and binding access to sectors like News Agencies and Advertising services,
9. Negotiations of significant access to Canadian public procurements at all levels.

From what we’ve seen so far of the text, European business lobbies could score nine out of nine from CETA’s services chapter. The result would be much weakened Canadian and provincial governments, a deregulated services industry, and an upper hand for European services companies — including water companies we must remember — in Canada. The solution is clearly not to educate Canadian companies so they too can dismantle European and EU state-level policies, it’s to stop negotiating this kind of NAFTA-on-steroids agreement as soon as possible.

Updates on the Canada-EU Forum and Van Loan’s speech later as I hear them…