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Canada’s procurement offer to EU will exclude hydro, urban transit: negotiator

Canada will be putting a “very ambitious” procurement offer on the table when it heads to Brussels in July for an eighth round of trade talks, said lead CETA negotiator Steve Verheul in a civil society briefing today. But the offer will not include hydro utilities, and will likely also exclude urban transit — both sensitive areas for some provinces which use public spending in those sectors for strategic development and job-creation purposes. Since utilities are a major interest for the EU, it’s hard to see how a procurement offer without them could be “ambitious” unless, perhaps, it is heavy on other municipal commitments which cities across Canada are protesting.

Today’s briefing from the Department of Foreign Affairs was the latest in a series of post-negotiating round Q+A sessions on the Canada-EU trade talks. These are not consultations but general updates on the status of the CETA negotiations, with a chance to ask specific questions afterwards. A briefing set for April was postponed due to the federal election, but the negotiations themselves went ahead as planned. This is incredible when you think about it. The election had the potential to–and did!–totally change the face of government. A new mandate on CETA was conceivable if unlikely. Yet provincial and federal negotiators welcomed their European counterparts to Ottawa to hash out public policy trade-offs in a boardroom just minutes from Parliament Hill. Talk about a democratic deficit!

According to Verheul today, the CETA talks went swimmingly in April, and the July 11-15 round will be “critical” in thrusting the negotiations forward toward an early 2012 completion. He said he expects full offers on procurement, investment and services to be exchanged prior to the next round, and perhaps agreed on by the provincial and European negotiators by the end of it, leaving only very difficult areas to be addressed during a ninth set of talks in October. The offer exchange could happen as early as June 20 during the next inter-sessional with the EU negotiators.

If offers have not been exchanged yet, it is not because of the election, said Verheul, but because both sides haven’t been ready. On services and investment in particular, the EU member states are struggling with Canada’s insistence that a negative list be used to draw up their lists of commitments. A negative list means if you don’t exclude a specific sector or service–ex. drinking water, health insurance, construction–it is automatically included in the deal. If as a province or European member state you miss something you’d like to exclude from CETA’s regulatory constraints, once offers are exchanged it’s too late.

Canada’s provinces and territories have been concerned about protecting strategic services and procurement from the deal but inter-provincial differences in priorities have made it difficult to come up with a balanced agreement that might still satisfy the EU, said Verheul. Provincial trade ministers will meet in PEI this June for a Committee on Internal Trade meeting, at which point they will be expected to present final offers to the federal government. These will be, like in the EU, shopping lists of important service sectors that could include water, health, transit, energy and other services where EU service companies would like to see more privatization. It is unacceptable that Canadians won’t get a chance to see these offers before they are put on the table, and the services are lost forever.

Once the offers are exchanged in July, explained Verheul today, they will be negotiated fairly quickly and resolved, then it’s down to the most significant sticking points. One of those is intellectual property. The EU is requesting major changes to Canada’s intellectual property regime for copyright and drug patent protection. Essentially they want a total re-write of Canadian IP rules. The death of the copyright bill Harper introduced last term “has been of some concern to the EU,” said Verheul, but he anticipates fast movement on this from the new majority Harper government.

On investment protection, Verheul said “there’s some uncertainty about how and when the EU will be ready to negotiate this given it’s now an EU level competence, so they must establish a mandate they’re all comfortable with. They’re not quite at that stage yet.” This is the notorious investor-state dispute process that neither Canada nor the EU really needs since they have two of the most highly developed legal systems in the world, which can apply handle corporate disputes with government policy. The true purpose of investor-state is to constrain the ambitions of governments who may want to seriously address today’s social, economic or environmental crises with strong public policy. If the EU can’t agree on including investor-state in CETA they would be doing everyone a favour.

Verheul added he does not think the many provincial elections coming up this fall will have too much impact on the CETA talks, as predicted by some commentators. That’s because the hardest decisions will be required further into the fall. Those difficult issues will include: automobile tariffs and rules of origin related to the highly integrated North American auto-sector, and requests by the EU to adopt their auto-standards; rules of origin and export restrictions on unprocessed fish in Canada; supply management, geographical indications, rules of origins and biotechnology issues related to agriculture, and; regulations in the EU that block some Canadian exports.

The EU is also pushing hard on financial services, said Verheul. It’s an area that has not been discussed once in the media even though changes sought by the EU would fundamentally deregulate the Canadian sector, making the country much more vulnerable to economic shocks like the one felt all over the world in 2008. EU negotiators also have offensive interests in deregulating our telecom sector and undermining cultural protections, as well as removing export restrictions and foreign ownership caps in some resource sectors, such as uranium.

Following the “critical” July round, Verheul said Canadian and EU negotiators will have another intersessional meeting in September “to turn the outstanding issues into a manageable number.” Then there will be a round nine of CETA talks in Ottawa this October, which might be the last full round.

I asked Verheul if he could elaborate on the EU’s requests on energy. He said they have put forward an “energy cooperation paper,” but that it does not contain a lot of content so far. The paper explains difficulties the EU is having with Russia with respect to access to resources, said Verheul, adding negotiators may be seeking a precedent-setting agreement with Canada with respect to resources.

Verheul provided no details about this vague proposal, but it could be related to the EU’s Ram Materials Strategy, in which the EU Commission is seeking ways (including trade-related) to guarantee stable supplies of raw materials for its high tech exports, in direct competition with China, Brazil and other rising economic powers. The Canada-EU energy agreement could look much like the proportional sharing chapter in NAFTA, only for resources as well as oil and gas.


The Council of Canadians will be heading to Brussels again in July as part of a third Trade Justice Network delegation to monitor the negotiations, meet with Members of the European Parliament and our allies to build the transatlantic resistance to CETA. You can help fight CETA, too, at the local, provincial and federal level. You can do this by:

Demanding to see the provincial offers before they’re put on the CETA table and lost forever.

– Convincing your municipality or school board to pass a resolution asking to be kept out of CETA.

– Warning your local councillors and provincial legislators that CETA threatens public water.

– Signing the petition against CETA.

– Coming out to one of our CETA tour stops with Maude Barlow and Paul Moist (CUPE).