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CETA implementation hits procurement, cheese quota & drug patent obstacles

The Canada-European Union Comprehensive Economic and Trade Agreement (CETA) was to have been provisionally implemented on July 1.

But that didn’t happen.


The CBC reports, “While it’s not the biggest snag slowing up CETA’s implementation, Europeans are concerned that some provinces aren’t opening up their procurement on the timetable they were expecting. Canada’s approach seems to be to fix a date for CETA’s implementation first, and then change the required regulations. But the EU wants to see the regulatory changes, particularly for Ontario and Quebec, before it agrees to a date.”

It adds, “Potential European bidders watch municipal and provincial infrastructure announcements – such as a recent contract by Metrolinx, the Greater Toronto Area’s transit authority – with interest. Future sole-source contracts could violate the open bidding the EU bargained for.”

And the article highlights, “CBC News has been asking the federal trade department for information about these regulatory changes in order to confirm provinces are ready to comply. The department says all the jurisdictions support CETA and have committed to making the necessary changes to statutes, regulations or policies.”

But some of those “necessary changes” to provincial laws (notably in Ontario, Quebec and British Columbia) have not happened yet – and may not happen until the fall.

Agricultural quotes

EurActiv adds, “Trudeau on [June 28] called on Europe to immediately apply the CETA free trade agreement while the two sides work through a final hurdle pertaining to agricultural quotas. …At the beginning of the week, a European diplomat and a Canadian official said the agreement was weeks away from implementation. All that was left was to decide what cheeses Canadian distributors would import. They have sent their demands to Ottawa for what varieties they wish to bring in to sell to domestic clients.”

CETA would mean that an additional 18,000 tonnes a year of European cheese will eventually be allowed into Canada tariff-free.

In early-May, The Globe and Mail had reported that Phil Hogan, the European Union commissioner for agriculture and rural development, was keeping watch on how cheese import permits are granted.

That article noted, “Mr. Hogan said the EU is keeping a close eye on how Ottawa doles out new cheese-import permits [for the 18,000 tonnes of additional cheese allowed into Canada]. …Canadian dairy farmers and processors want Ottawa to give all the new quota to domestic cheese makers, allowing them to import cheese from Europe, arguing that they are the ones most harmed by the trade concessions made to Europe.”

Dalhousie University professor Sylvain Charlebois says, “Priority should be given to small dairy processors, which are mostly family-owned fine-cheese makers. Farmer-owned co-operatives should also be considered in the mix as well, given their links to production. If not done right, we could see our dairy-processing sector suffer. CETA makes this sector highly vulnerable and many great Canadian artisan cheese makers could disappear.”

But The Globe and Mail article adds, “Giving these permits to Canadian cheese makers doesn’t sit well with many importers, who say that could give the domestic industry too much control. Mr. Hogan said he warned Canadian officials against causing ‘unintended consequences’ when it allocates import quotas.”

Pharmaceutical patents

Another CBC article adds, “CBC News has learned that the European pharmaceutical industry doesn’t want the EU to set a date to start implementing the deal until Canada publishes and consults on some regulatory changes promised to generic drug manufacturers, and some member states are expressing these concerns to the European Commission. Persistent legal confusion in Europe over whether the intellectual property measures affecting pharmaceutical patents can be applied without individual member countries’ ratification may also be prompting some to want to hit pause.”

That article adds, “Roughly one-quarter of Canada’s bill to implement CETA, C-30, dealt with changes to intellectual property rules for pharmaceuticals. But the end of dual-track litigation [a practice in which brand-name pharmaceutical companies can sue generics multiple times on the same patents] had been expected separately, in the form of new regulations published in the Canada Gazette. Those still aren’t public. …[The promise to end dual-track] was a separate pledge to placate the generic drug industry because other parts of the deal may benefit brand-name pharmaceuticals.”

There is speculation that the provisional application of CETA could now be delayed until sometime in 2018.

To be fully implemented (with its controversial investment court system provision), CETA must still be ratified in 38 national and regional parliaments in the European Union (where it faces an uphill battle) over the coming years.