While Canadians sit around in the dark on Harper’s free trade talks with Europe, European parliamentarians are grilling our government on the draft agreement’s investment, procurement and services chapters. Yesterday afternoon, the European Parliament’s International Trade Committee heard from Ross Hornby, Canada’s ambassador to the EU, about the state of negotiations toward a Comprehensive Economic and Trade Agreement (CETA). Following his presentation, members of the Greens and European United Left–Nordic Green Left had some tough questions for both parties, including:
Why was the EU Commission considering a NAFTA-style investor-state dispute process and has it studied the effects of NAFTA’s Chapter 11? Why is the EU Commission trying to dismantle Ontario’s Green Energy Act? Why do the negotiations have the support only of large corporations on both sides of the Atlantic? And, notably, What does the Canadian Ambassador think of Canadian labour and civil society concerns with how the agreement could encourage privatization of public services?
If it seems like these European politicians know more about CETA than our MPs, guess what — they do. The EU trade committee has apparently seen a draft text. So what’s Harper’s excuse for keeping it locked up? Probably, he doesn’t want its controversial aspects coming to light as they did, even for a brief moment, yesterday in Brussels.
You can watch Ambassador Hornby’s full presentation and subsequent Q+A on the EU Parliament’s website by clicking here. Skip ahead to minute 10:59 (or 10:57 for a small introduction by Trade Committee Chair Vital Moreira of Portugal). Here’s a summary of the discussion.
What do Canada and the EU want out of these talks?
The Canadian ambassador started by claiming that even though Canada is the fourth largest investor in Europe and Europe the second largest in Canada, the relationship, which includes goods, services and investment flows, is under-traded. A lot of Europeans work for Canadian companies, he said, including Bombarier, Research in Motion and SNC Lavalin, while European companies are well represented in Canada, particularly in petroleum, which the ambassador is pleased about.
The negotiations are pursuing rapidly. There was a bracketed text, including each party’s offers on goods, services and investment, after the first round of talks in Ottawa last October, and in Brussels in January the objective was to remove as many of those brackets as possible. So the negotiations will become more sensitive in Ottawa during the third round of talks, April 19 to 23.
The provinces and territories are sitting in on talks that affect their constitutional jurisdictions, including government procurement, regulatory cooperation and some elements of investment. The faster the negotiations happen, the more likely we will have an agreement that all can support, said Hornby. After the fifth and final round of talks in October (again in Ottawa this October, following a fourth round in Brussels in July), the two sides will take stock of where they are. Canada’s main priorities are greater market access and improved labour mobility while the EU Commission wants access to procurement and to increase the scope of their investment in Canada, said Hornby.
Canada’s concerns with tar sands ‘myths’ and border adjustments
These negotiations will send a “strong statement that even in difficult times we reject protectionism and embrace open trade,” said Hornby, before launching into a defence of the Alberta tar sands. Canada is “very concerned” with carbon border adjustments — tariffs at the border on goods whose production emits too many greenhouse gasses — which our government thinks “violate core trading agreements.” Hornby also expressed his concerns that European ideas about the tar sands are based on myths, that they are not the dirty fuels that NGOs claim and have comparable emissions to other petroleum imports to the EU. Canada’s challenge, he said, is to develop the tar sands in a responsible way, partly with the help of carbon capture and storage, which was the ambassador’s main example of “renewable” energy development in Canada.
He concluded with a summary of the condition of the Canadian economy, including projected growth of 2.4 per cent in 2010, too high unemployment of 8.2 per cent, rising merchandise exports and a projected deficit of 3.7 per cent of GDP this year.
Canada called a “resource country” by a fan from Slovakia
The first question was a softball from Peter Štastny, a Christian Democrat from Slovakia whose son played in the Olympic finals. Štastny attended some of the games, as well as four business symposiums, one of which included big corporations from Canada and the U.S., another dealing with energy security and the future. He said he follows the media in Canada, which has given the EU negotiations a smooth ride so far, but asked what the Canadian ambassador sees as roadblocks in the future. Štastny called Canada a “huge resource country” that Europe should stick close to, namely because, like the United States, the EU should be looking for friendly sources of energy.
Ambassador Hornby’s response: The best deal will be the most ambitious and most quickly negotiated so that trade-offs can be made. That’s one of the reasons the provinces have unanimously endorsed the negotiations. They continue to have market access issues with trade into the EU, regulatory issues and some other concerns. So if we keep all those issues on the table and negotiate a win win deal on both sides, he said, we anticipate the provinces will endorse the deal as they have with previous negotiations with Canada, the U.S. and Mexico in the context of NAFTA.
The Greens want answers on investment, Ontario’s Green Energy Act
The second two questions came from Yannick Jadot, a Green from France who directed his concerns to the EU Commission first, but not before questioning the Canadian Ambassador’s suggestion that the tar sands would count as sustainable energy. If you read the agreement from the 13th of January, he said, it looks like the EU is committing to a NAFTA type model on investment where a dispute settlement could authorize an attack of investors against the state. Jadot said the Greens were taken aback when they read this because when it comes to implementation of the Lisbon Treaty, it seemed that Europe had yet to redefine its investment policy. (Lisbon came into effect late last year and gave the elected Parliament a greater say in international trade policy.) Jadot was concerned that the EU Commission was using the Canadian negotiations to make an important policy decision that should be settled by Parliament. (This is much like the concerns in Canada that the Harper government is using the EU talks to set copyright policy.) He added that he would like to know what kinds of lessens the Commission will draw from the NAFTA Chapter 11 experience.
Jadot then stood up for the Ontario Green Energy Act, which he called “a very dynamic renewable energy policy” when it comes to provincial feed-in tariffs (the rate Ontario pays for the clean energy) and local content requirements on production in order to get those rates. “We’re wondering whether Europe will fight for a renewable energy policy with Canada because I think this is important from a climate change point of view,” he said, asking why the Commission would “go against the Green Energy Act.”
EU Commission response: First, indeed investment and an investor-state mechanism is part of the Canadian requests on dispute settlement. The EU so far has never had such a provision in its own trade agreements and we will have to deal with this request. With regard to the Green Energy Act, we are not against the Act per se. What we are against is a clause in this act which favors local content and we believe that this is a type of protectionism or discrimination against EU companies, so this is something we’re still analyzing but again we’re not against the Act as such and certainly not against the promotion of green and environmentally friendly energy.
Ambassador Hornby’s response: He started by stating he did not mean to say that tar sands are renewable but that their development needs to be done in an environmentally sound way. Canada is seen as an oil and gas producer but we are in fact big on renewables. We have some of the biggest carbon capture and storage projects on the go, including in the tar sands. Quebec and Ontario also have huge tenders for wind power. By 2020, 90 per cent of electricity generation will be greenhouse gas emission free, he said. “Most countries can only dream of achieving that level.”
“With respect to the investor dispute settlement provisions, that is a Canadian objective,” said Hornby. “We have good practice with investor-state dispute with other agreements we’ve signed. We’re aware of the Commission’s concerns with respect to the role of the EU and we’ll deal with this as we move forward.”
On the Green Energy Act, Hornby said that federal authorities support the goal of the Act and the provisions with respect to local content are things we’ll be discussing generally with respect to the discussions on procurement.
Irish solidarity with the Canadian opposition to CETA
Joe Higgins, an Irish representative of the European United Left–Nordic Green Left, said he wanted to relate concerns of the Canadian labour movement opposition to CETA, and pointed out that the push from this agreement comes from large corporations, both Canadian and based in the EU, organized through the Canada-Europe Round Table on Business (CERT).
“What are the implications for public services in Canada in particular arising from this agreement, notably in urban transport, shipbuilding, water, electricity,” asked Higgins. “Will it be the case that under an agreement, government procurement will be open to bids on local services and has the Canadian government any concerns of the implications that this will have on wages and the conditions of the workers providing those services…
“I wish to talk about water services particularly,” he continued. “I know from my friends and colleagues in Canada that Canadian communities have resisted water privatization in many cases. But EU multinationals dealing with water are thirsty beasts indeed on privatization.”
Higgins asked what the Canadian position was with respect to public supply of water and the threat from multinationals. He then asked the Commission how NAFTA relates to the current agreement, and what the implications are for a potential race to the bottom, especially with respect to workers.
EU Commission response: With regard the question on public services, “Yes indeed the EU is requesting access to procurement markets in areas of water, electricity and urban transport. However, we don’t believe–yes it will increase competition–it is a race to the bottom on wages since the EU is not a low wage area.”
Ambassador Hornby’s response: “Canada has an export based economy so Canadian jobs depend on market access, investment access and open trading rules worldwide. So I’m confidant this agreement will support jobs through increased trade and incrased investment and regulatory cooperation.”
There was no answer from the Canadian ambassador on the government’s position on water privatization.