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NEWS: European procurement favours European companies

Postmedia News reports that, “The European Union, which has stirred a controversy by demanding that Canada open up the lucrative government procurement market to European competitors, is launching a new campaign against widespread protectionism within the 27-nation EU. The effort, which includes possible adoption of tougher rules against ‘favouritism, corruption and conflicts of interest’, underscores the difficulty Brussels will have in offering reciprocal access to Canadian firms on the procurement front, say analysts. An EU document released last week cited recent research saying that (in Europe) 87 per cent of contracts for government-purchased goods and services, from fire trucks to syringes to educational services, went to domestic companies.”

The article also notes that, “Brussels has been pushing member states since the 1970s to stop favouring local companies.”

“Simon Evenett, director of the Swiss Institute for International Economics, said the EU’s poor results suggest that ‘Canadian exporters, especially those that don’t have subsidiaries in Europe, won’t gain much from any negotiated opening up of the EU procurement market.'”

“The Council of Canadians, which argues that provinces and cities will lose valuable tools to create jobs and advance social goals, said Canada is poised to make a ‘ridiculously’ generous procurement offer with no assurance Europe will reciprocate. ‘The EU procurement market may become even more closed to Canadian bids as we open ours wide to the EU and the U.S., which will no doubt want the same access we give the EU,’ said spokesman Stuart Trew, citing comments made last week by a top official in Brussels.”

“Quebec Premier Jean Charest recently came under criticism for saying he wants Hydro-Quebec excluded from the trade deal because of the utility’s role in regional development. Ontario Premier Dalton McGuinty ruffled feathers in Europe for his 2009 Green Energy Act, which favours Ontario companies providing cleaner energy alternatives.”

So, the growing arguments against CETA now includes this concern about procurement plus:

1- While trade minister Peter Van Loan argues that CETA will add $12 billion to Canada’s GDP, a Library of Parliament study says, “The Canada-EU joint study was completed before the global financial and economic crisis and does not reflect the impact of the crisis, nor of the debt crises facing several EU member states” and advises “caution” in relation to this projection, http://canadians.org/campaignblog/?p=6128;

2- An analysis by CAW economist Jim Stanford shows that CETA could mean the loss of up to 152,000 jobs in Canada, http://canadians.org/campaignblog/?p=5110;

3- A study by the Canadian Generic Pharmaceutical Association warns that the patent changes being sought by the European Union through CETA could potentially add hundreds of millions of dollars to Canadian medication costs annually, http://canadians.org/campaignblog/?p=5985;

4- The European Commission’s Sustainability Impact Assessment on CETA states, “The Canadian economy is energy and carbon‐intensive. The oil and gas sectors, notably the tar sands industry in Alberta, are in part responsible for the important increase in Canadian greenhouse gas emissions. Where the CETA contributes to greater extraction and investment in the tar sands, it is likely that Canada’s emissions of greenhouse gases will increase”, http://canadians.org/campaignblog/?p=6114;

5- The impact assessment also warns that CETA will open the door for European water utilities, such as giant transnationals Suez and Veolia of France, to privatize Canadian public water services and raise rates. Such companies would be able to challenge local water conservation and source protection rules, as well as bottled water bans, as unfair barriers to trade, http://canadians.org/campaignblog/?p=5864.

The Postmedia News article is at http://www.canada.com/business/pushes+open+Canadian+market+despite+very+closed+system/4204511/story.html.