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Canada refuses to renegotiate CETA despite Brexit vote

Council of Canadians chairperson Maude Barlow argues against CETA at meeting held in the British Parliament, November 2015.

The Trudeau government is refusing to renegotiate the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) following the Brexit vote on June 23, despite the departure of the EU’s second largest economy and Canada’s largest trading partner in the EU.

The Globe and Mail reports, “Canada and the European Union are both reluctant to reopen their landmark trade deal should the United Kingdom quit the EU, meaning the concessions Ottawa yielded to achieve the agreement would remain the same even as the size of the prospective market shrinks. …The Canada-EU deal was predicated on Britain being part of the European Union and concessions made by Canada envisioned these as worthwhile tradeoffs for access to 500 million consumers. Britain, with more than 60 million citizens, is responsible for close to 20 per cent of the EU’s annual economic impact.”

The article adds, “A senior Canadian government official assigned to brief media Wednesday said both jurisdictions are afraid the agreement could come apart were Ottawa and Brussels to try to whittle down concessions in the deal to reflect the British exit. ‘The main concern here is that if you start to … open the door to renegotiating some of those numbers or some of those areas, then there is a very strong risk that the entire agreement starts to unravel’, the senior official said. He spoke on the condition, laid down by International Trade Minister Chrystia Freeland’s office, that he not be identified. Canada does not want to renegotiate the deal, the official said.”

The Canadian Press notes, “Scott Sinclair, a senior research fellow with the Canadian Centre for Policy Alternatives, said the government needs to make a critical evaluation of how the deal could be diminished by Britain’s departure. ‘We’re going to be paying a lot more for drugs. We’re going to be risking more investor-state lawsuits. Dairy farmers took a hit’, he said. ‘With Brexit it’s fair to ask, are we getting less in return?'”

The Council of Canadians agrees.

Two weeks ago, in fact the day after the Brexit vote, we highlighted in this blog, “With the United Kingdom voting to leave the European Union, the Council of Canadians is calling on the Trudeau government to support our call for the Parliamentary Budget Officer (PBO) to conduct an independent analysis of [CETA] minus Great Britain. We believe it is prudent for the Canadian government to delay their signing of the deal (scheduled for October 27) and conduct a new study on this ‘free trade’ deal given both the turn of events yesterday with the Brexit vote and the reality that the Canada-EU feasibility study that provided the rationale for CETA talks is now almost a decade old.”

Our rationale included that the CBC has noted, “Canada does far more business with the UK than other EU countries”, “CETA was based on tradeoffs and calculations that included British consumers and businesses — compromises that were sometimes painful and prolonged”, and that the UK represents about 10 per cent of the beef sector Canada was hoping to gain with the deal.

In terms of the beef sector, an iPolitics article quotes John Masswhol, director of government and international relations for the Canadian Cattlemen’s Association, who says each commodity group will have to “re-assess” the value of the deal now, adding “Maybe the value is the same, maybe it isn’t. It’s too early to draw conclusions.”

Following the Brexit vote Freeland said she expects CETA to be signed before the UK invokes Article 50, which would begin a two-year process for that country’s separation from the EU. Freeland says, “It seems quite possible to me that CETA will be … certainly signed, and very likely ratified, even before Article 50 is invoked. And very, very likely to go into force while Britain is still part of Europe.”

Our UK-based ally Global Justice Now stated earlier this week that they had “released an expert opinion on CETA and Brexit which argues that if the UK doesn’t formally leave the EU before CETA is ratified, then it would be tied into the trade deal for a period of twenty years after announcing any intention to leave the deal.”

In terms of key upcoming dates:

  • September 9 – a new Conservative leader and British prime minister will be chosen

  • October 2-5 – British Conservative Party conference in Birmingham

  • October 27 – Canadian prime minister Justin Trudeau expected in Brussels to sign CETA at Canada-EU summit

  • November 29 – European Parliament International Trade Committee expected to vote on CETA

  • December – CETA could go to European Parliament for plenary ratification vote

  • 2017 – The Globe and Mail reports, “The Trudeau government says it expects more than 90 per cent of the Canada-EU deal to take effect in 2017…”

For more on our campaign to stop CETA, please click here.