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Optimism about CETA ‘souring’

An article today by Embassy about the (non) progress on resolution of the final outstanding issues in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) says that “Trade watchers are worried that pushback over European Union trade negotiations with the United States could be spilling over into the EU’s trade talks with Canada.

There is also mounting frustration among those who had expected Canada and the EU to wrap up their talks months ago, with one source close to the talks who asked not to be named saying that the government ‘has kind of lost their cheerleaders.'”

Growing opposition in Europe to the US-EU Transatlantic Trade and Investment Partnership (TTIP) has grown so strong that the European Commission has been forced to pause negotiations on the controversial investor-state dispute settlement (ISDS) chapter of that agreement and hold EU-wide consultations on ISDS, which run until July 6, with a report of its findings expected in the fall.

Critics of ISDS have rightly pointed out that ISDS provisions in CETA will serve as a “Trojan horse for US firms to use their Canadian affiliates to file ISDS claims in Europe” and have called on CETA negotiators to pause ISDS negotiations in CETA, saying, “We urge the Commission and Member States not to rush into finalising the trade talks with Canada until the ISDS issue in TTIP has been resolved.”

The Embassy article also points out that seven months after a highly publicized announcement by Prime Minister Harper and European Commission President Barroso of an “agreement in principle” that required resolution of only a few technical details to finalize, negotiators are still struggling to overcome significant disagreement on the text (lending credibility to opposition charges that the October announcement was a “charade” to distract from the Senate scandal).

According to the article, “outstanding issues include financial services, investment protection, maritime services, intellectual property rights and tariff quota management for beef and pork imports.”

In a stakeholder briefing held yesterday in Brussels on the TTIP ISDS consultations, Rupert Schlegelmilch, who focuses on investment policy for the Directorate-General for Trade in the European Commission, confirmed there are a number of “thorny” issues holding up negotiations. He pointed to disagreements about the so-called most favoured nation (MFN) clause, which can be used by investors in disputes to “import” more favourable investment protection terms from other agreements into CETA; a difference in views between Canada and the US on an umbrella clause in the agreement; and disagreements about exclusions of intellectual property rights protections from ISDS, rumoured to stem from Canadians concerns about challenges similar to the $500 million Eli Lilly NAFTA challenge.

These are, needless to say, not insignificant technical details.

While expectations still are that negotiators will soon reach a final agreement on CETA, with growing concerns in Europe (and around the world) about ISDS, elections for a new European Parliament happening later this month, a dispute over whether or not CETA is a ‘mixed’ agreement to which Member States must also give their consent (an issue that may need to be resolved by the European Court of Justice), as well as the formal ratification process in both Canada and the EU, there are still plenty of opportunities to derail this dangerous deal.