Lead CETA negotiator Steve Verheul (left) with former trade minister Peter Van Loan (Source: DFAIT)
Civil society groups got their first briefing since October today on the status of ongoing Canada-European Union free trade negotiations. While it sounds like discussions are advanced in a number of areas, we can ignore reports of a deal by the end of March. Wide gaps remain on rules of origin for automotive products, fish and agriculture; the two sides have yet to talk seriously about the EU’s extensive intellectual property demands in the areas of drug patents, agriculture and copyrighted material; and negotiators haven’t even broached investment protection yet. The earliest all this could be dealt with, said Canada’s lead negotiator, was at the end of an April round in either Brussels or Ottawa, with a deal ready to sign by the summer if all goes according to plan. Click on “Read more” for a more-or-less concise account of the briefing with links to further commentary.
From a February 16, 2012 civil society briefing on the CETA by chief negotiator Steve Verheul:
There have been discussions with the EU over the past couple of months and Canadian negotiators expect challenges in the coming weeks and months. Both sides met in Brussels in December then in Ottawa a few weeks ago for one and a half weeks of negotiations. They are narrowing down the issues and making progress to isolate the most difficult areas. Generally they have done well in achieving that in both of the last two sessions.
On the text, they have finished or virtually finished the telecommunications chapter, mutual recognition of professional qualifications, and the services text portion is also virtually done, as well as the government procurement text (but not necessarily the procurement commitments and reservations). They can see a path forward on Technical Barriers to Trade, Sanitary and Phytosanitary Standards, and on treatment of wines and spirits, “we’re getting close to a landing zone.”
There is more work to be done on the offers in services and investment, with some “cleanup on the EU side,” such as some overlap between EU-wide reservations and those put forward by member states. There is work on the Canadian side at the provincial level to make sure these offers are in shape. (To see these initial offers, visit the Trade Justice Network website where they are posted.) They will be exchanging revised offers in early March.
Discussions on the protection of investment in each region (including investor-state dispute process) have not begun yet because the EU continues to work with member states on that. (For more about this, see my November 10 blog.) On the goods (tariffs) side, negotiators are reviewing where they can go further. The EU has signlalled it can make more room on fruits and vegetatlbes and processed foods. Rules of origin continues to be much a more difficult issue and the focus of a lot of effort. (See Paul Wells on this from a December blog at Macleans online.) The EU has shown little flexibility so those talks will continue over weeks and months.
On government procurement, negotiators have lucked out on sensitive issues and offers have not been made on those areas of procurement (ex. by utilities or for certain services such as transit). They are continuing to clean up the offers on both sides so they can “find a degree of fairness and balance.”
In terms of going forward, services and investment reservations will be a focus in the March meetings, as will rules of origin on issues across the board but very sensitive in automotive products, fish, agriculture and textiles to some degree. They also need to focus on issues where they haven’t spent a lot of time, including intellectual property rights (patents and pharmaceuticals, copyright) and enforcement of IPR, as well as geographical indications for agrifood products. Also on agriculture, they haven’t talked about beef and pork access, and the EU continues to push for access on dairy, but those issues have not been broached either. Rules of origin and tariff issues will be tied to those sensitive issues.
Federal negotiators met with provinces in December, mid January and during the EU session earlier in February. They will meet again at the end of February. There’s a negotiating session in Brussels between March 12 and 19, and a plan to meet again in April, though they haven’t figured out if it’s in Brussels or Ottawa. By that point, It will be a small group “trying to assemlble the overall package.” That’s the most likely timing “for a breakdown or stalemate in the negotiations” (in April), so it will be the most delicate period. “If we get through that we hope to move onto a conclusion over the following months,” said the Canadian negotiator.
Finally, on water services and the Council of Canadians/CUPE concerns that they were not adequately protected in Canada’s initial offers, the negotiator said Canada is not doing anything in CETA that it hasn’t done in the GATS (General Agreement on Trade in Services) or other free trade agreements with other partners. He said It isn’t a focus of the EU and that they’re not putting pressure on Canada and that it won’t become a sticking point. “We’re not moving in a brand new direction on water.”
However, the EU did feel it necessary in its services and investment offers to seek a broad exemption for drinking water and sanitation services — an exemption Canada is not seeking. The discrepancy remains unexplained. Canadian governments and negotiators have for years assured us that water for human use is not covered in Canada’s existing commitments. Now the tune has changed — it’s there and it’s not a big deal! In fact, it would be very easy for Canada to reciprocate the EU request to exempt water. The fact we are not doing so is still a kind of welcome mat for European private investment in water services. The novelty will be in CETA’s investor-state dispute process which will give water firms new tools with which to frustrate municipal governments looking to remunicipalize or create new water monopolies in the future.
Q+A
Questions for Canada’s negotiator tackled whether Canada has secured a broad cultural exemption (there is no language yet and the EU continues to lobby against one), whether foreign ownership limits in telecom will survive (apparently, which we could see from the leaked services offers), how CETA will be enforced in the provinces (with letters of compliance, political statements and legislation where needed), and copyright (EU remains not entirely satisfied with the new Harper legislation and wants fewer exceptions for educational use, as well as a notice-and-takedown system for Internet copyright infractions).
It was good to hear the EU is not satisfied with Canada’s procurement offers. Every week now we report on another municipality seeking an exemption from this part of the agreement. In fact, as we were listening to Canada’s negotiator explain the state of play I got an email from a friend at CAW saying the Ontario town of Ingersoll had just passed a CETA motion. Another email came in a few seconds later from our Prairies Organizer Scott Harris that included a link to a CBC radio interview with Premier Selinger in which he says Crown corporations and the province’s public auto insurance should be carved out of CETA. “We’re also concerned (about) what patent protection will do to the cost of drugs,” he says in the interview.
Finally, some of you in Ontario might also have noticed that an otherwise gruesome austerity plan from former bank executive Don Drummond nonetheless contained a warning about how CETA could undermine efforts in the province to increase the use of generic drugs to offset rising costs. In other words, the CETA negotiations are increasingly controversial. Covering municipal governments in the procurement chapter is unreasonable and the more cities and towns protest the idea the less likely it will be the provinces will be able to get away with it. If Selinger wants to protect Crown corporations and Ontario wants to protect the Green Energy Act, it’s fair to say municipalities should have a say in whether they need to hold onto some policy space, too.
The Council of Canadians is in the process of updating its action alerts and other web content to take account of this new information. Check back regularly.
