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CETA negotiations almost finished… except for all the problems

Canada’s lead CETA negotiator, Steve Verheul, briefed civil society groups and researchers this afternoon on the status of the Canada-EU trade negotiations. In the past, I’ve dumped the entire content of these briefings into this space but I’m not sure it’s useful this time since a lot of it would be a repeat of those posts. That might sound like the CETA talks are stalled. If only. In Verheul’s opinion, though “there is a large amount of work to be done,” we really are at the endgame. A deal could be finished or nearly finished by Christmas.

CETA timeline

According to Verheul, the European Commission is meeting this week and next with member states to line up support with the eventual outcome of the deal. These meetings are also preparation for the October 15-26 negotiating round in Brussels, which “could well be our last full negotiating session.” The provinces and territories will join Canadian negotiators in Brussels to tie up any loose ends with their procurement, services and investment offers.

The federal government met provincial-territorial officials earlier this week to make sure they liked the strategy and positions Canada’s negotiating team will be taking into this last stretch. The feds have met independently with each government to get their perspectives on the talks and “I think they’re all where we want them to be at this point in the discussions,” said Verheul. Quebec is a wild card, however, with the PQ government implying in media articles this week it may want to revise its CETA offers with help from civil society organizations.

Beyond the end of October, the EU will go back to member states on November 9 for a further discussion on what an appropriate “landing zone” would look like on contentious issues such as European tariffs on fish, quotas on Canadian beef and pork, and how much Canadian content an automobile needs to contain to get into Europe tariff-free. Later in November, agricultural and trade ministers (I believe Verheul meant Canadian, provincial and European ministers) will meet in Brussels for a discussion on agriculture. This could be a one- or two-day affair, or go to multiple days.

Following that, on November 29, there is a foreign affairs council meeting in Europe where the Commission hopes to present a final or close-to-final package on CETA. While this ministerial process moves forward, presumably at the Harper cabinet level also, “we’ll have concurrent work carrying on other issues that don’t need ministerial direction,” said Verheul.

The September negotiating round

European negotiators joined the provinces in Ottawa this September where they spent “a fair amount of time on investment rules,” according to Verheul. They have been playing catchup because the Commission only got a mandate on investment rules a few months ago. It was easy to agree on some provisions, said Verheul, but in other areas there are different approaches.

[From these briefings and communications from the Commission, you get a sense Canada is trying to take into account its negative experience under investor-state litigation under NAFTA while some EU member states are pushing for maximum investor protection, as exists in bilateral investment treaties signed by Germany or the Netherlands, for example. So this is a big, ugly conversation indeed. We wish they would just accept the recommendation of the Commission’s own Sustainability Impact Assessment and the European Parliament by not including an investor-state dispute settlement process in CETA.]

The September round also dealt with rules governing monopolies and state enterprise, rules of origin on automobiles and agricultural products, and the crucial trade-off in the CETA between more access into Europe for Canadian beef and pork, and more access into Canada of Danish, Dutch, French and other European cheeses. They talked about financial services and geographical indications, and they closed the chapter on subsidies.

What’s left to discuss

According to Verheul, the investment rules issues are complex and will require a lot of time. The services and investment chapter will take time “due to challenges with some member states on reservations.” [This is an area where we continue in Canada to push the provinces to better protect drinking water and other municipally delivered services to match the EU proposal.] Along with financial services, these are areas that do not need to be brought to the ministerial level but that will continue to be negotiated throughout November.

The issues that will be kicked up to the political level are numerous and controversial on both sides of the Atlantic. These are the endgame issues:

– Automobiles and other vehicles where the EU is insisting on a high (i.e. impossible to meet) Canadian content in exchange for tariff-free access to the European market.

– Agriculture, beef and pork is very sensitive in the EU, and Canada has not shown movement on dairy. For fish, Canada is not happy with Europe’s proposed seven-year phase-in period for tariff reductions on Canadian imports.

– Government procurement is not settled and they have not found a way forward, with the EU pressing for a few more concessions in energy and transportation.

– Intellectual property rights have barely been looked at with the exception of geographical indications, which will need a ministerial decision. More importantly are the pharmaceutical policy issues, which Canada has apparently not decided on yet but where the European Commission is pushing and being pushed itself by some member states who have attached importance to it.

Quebec consultation today

Following the briefing with Verheul, the Trade Justice Network caught up with Quebec allies on how their consultation with the new Parti Quebecois government went. The information they received from Quebec negotiator Pierre Marc Johnson was much the same as what we heard on the DFAIT call today, but the openness to concerns from civil society was refreshing. (One interesting little PMJ tidbit was that Canada wants to finish CETA before February 2013 when the U.S. and EU are expected to begin their own comprehensive trade and investment negotiations. We’ve known from Day 1 the U.S. is Europe’s ultimate prize — Canada is just a stepping stone.)

A door was opened for suggestions on how to change the province’s negotiating mandate, and that could be the difference between giving up the store or holding the line on things like local content in transit and energy procurement. It could also mean pulling municipal governments out of the deal completely. I’m thinking big here, dreaming some might say, but when doors open a crack your impulse is to kick them wide open.

That’s what we’re hoping to do across Canada — to take the Quebec example by demanding open consultations with other provincial governments. We’ll have a fresh Action Alert up on Tuesday to help you do that. In the meantime, you can use our older Alert aimed at provincial governments by clicking here. Happy Thanksgiving everyone.