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NEWS: Obstacles delay CETA offers by three-months

Postmedia News reports today on a “three-month delay in the presentation of formal offers by each side” in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) talks. “Both sides had planned throughout 2009 to table formal offers on the most sensitive issues — including services, intellectual property, investment, culture and the opening of lucrative government procurement contracts to foreign bidders — prior to the sixth round of talks scheduled for mid-January. The exchange-of-offers process has been moved to round seven, to take place in Ottawa in April.”

Why the delay?

1- “While there are numerous areas of dispute, the delay was caused primarily by political concerns in debt-plagued and increasingly protectionist Europe. It was thought that the deal, by liberalizing trade in professional services, could exacerbate tensions over immigration, according to sources close to the talks. …Van Loan acknowledged there is a disagreement over the liberalization of professional services in areas such as investment banking, engineering, law and accounting.”

2- “Canada…is pushing for a so-called ‘negative list’ that will declare that all services will be covered except those specifically excluded. Europe wants a more restrictive positive list that includes only those areas that are covered. ‘The delay in exchange of offers is related to the European Union seeking member states’ support for them to use the more ambitious negative list approach on services,’ Van Loan said…”

3- “Brussels-based trade analyst Hosuk Lee-Makiyama said the delay is due in part to Britain’s new coalition government, dominated by Prime Minister David Cameron’s Euro-skeptic Conservatives. ‘They’re basically obstructing and trying to slow things down’ said Lee-Makiyama, adding negotiators are ‘getting nowhere on this and just going in circles’. London’s huge financial services sector has been traditionally open to foreign investment. But Lee-Makiyama said the impact of the global recession on the industry — combined with Tory skepticism toward the EU and hostile British attitudes toward immigration — are creating fears it will be difficult to sell politically a trade deal that implies an influx of foreign professionals to Britain. …The (immigration) concern is less about Canada and more about fear that a liberal Canada-EU deal will set a precedent for a possible future deal with a much larger trading partner, like the U.S.”

4- “An EU official said the U.K. isn’t alone in expressing concern, as France, Italy and Spain are also dragging their heels.”

5- “There are numerous other, potentially more serious clashes, including Europe’s demand that Canada restrict its ability to block foreign takeovers.”

6- “Brussels is also frustrated by what it considers Canada’s overly-broad definition of cultural industries that must be exempted from any deal. In particular, the Europeans want Canada to allow foreign ownership of newspaper and book publishing and distribution. Quebec Premier Jean Charest recently met (in Paris) with President Nicolas Sarkozy to discuss Quebec’s unshakable opposition to any liberalization in the culture domain.”

7- “The most contentious issue is procurement. Europe wants access not only to federal and provincial government procurement contracts, but also to Crown corporations and institutions in the so-called MUSH sector — municipalities, universities, schools and hospitals. Many Canadian mayors, and groups like the Council of Canadians, have voiced opposition to a deal that would deny governments the ability to favour local businesses and create jobs.”

Trade minister Peter Van Loan says the talks remain “ahead of schedule”.

The full article can be read at http://www.montrealgazette.com/business/Canada+trade+deal+still+track+Loan/4028977/story.html.