The international trade committee is hearing from witnesses on the Canada-EU free trade negotiations (CETA). On Tuesday, they included copyright activist, news columnist and University of Ottawa professor Michael Geist, Richard Doyle with the Dairy Farmers of Canada, and Ron Clow, general manager with Cavendish Farms, a frozen potato producer owned by the Irving empire in Atlantic Canada. The first two were skeptical, the third largely supportive of the CETA negotiations. Their presentations, and subsequent questions from trade committee members, covered agricultural tariffs, geographic indications, digital locks on CDs and movies, genetically modified crops, and Canada’s supply management systems.
COPYRIGHT AND CETA
First up was Mr. Geist, appearing as an individual. The copyright activist has been commenting on the CETA negotiations in op-eds for the Toronto Star and Ottawa Citizen, and in regular blog entries. He told committee that to fully understand the agreement’s intellectual property rights (IPR) provisions, particularly on copyright, you need to view them pressure on Canada from the EU and United States to reform domestic policies.
Canada was part of ACTA talks (Anti-Counterfeiting Trade Agreement), in which the U.S. and EU were protagonists. Mr. Geist said that while few would oppose efforts to stop dangerous counterfeit products, ACTA was far too secret for an intellectual property discussion that should have happened at the World Intellectual Property Organization (WIPO). He added that ACTA went far beyond commercial issues and strayed beyond international norms of IPR.
Luckily, he said, a strong international coalition, with members in Canada, fought some of the most problematic parts of ACTA, for example proposals to enforce suspected (not proven) infractions of copyright (the three-strikes-you’re-out rule). Many of those proposals rejected in ACTA are reproduced in CETA, said Mr. Geist, including the secrecy.
“There have been leaks, but commenting on leaked chapters is not a substitute for full consultations,” he said, adding that waiting for a final text is not good enough; that we need public access before a final trade off. He then cited five substantive problems with the CETA IPR chapter in general and its copyright provisions specifically:
1. The inclusion of IPR is a big shift for Canadian trade policy, which is normally about tariffs and other commercial market access issues. The process in CETA is not a sound one. “In a hotly contested area to have business regulation made in this way is not sound,” he said.
2. The inclusion of copyright in the deal is one sided. The only request from Canada is a ban on camcordering movies, which the EU is not likely to accept. There are no real demands from Canada. The EU is simply trying to export a copyright regime to Canada that it could not secure in ACTA, he said.
3. Some rights holders have used CETA to circumvent domestic copyright reform, Mr. Geist said, giving the example of the the Canadian Publishers Council calling for an extension of copyright and a sui generis approach to database protections. Both reforms were rejected during the 2009 copyright consultations, he said, and are not found in the Harper government’s new copyright Bill C-32.
4. Substantive proposals demanded by EU are designed to rework Canadian copyright law in a way that extends beyond international law. For example, the digital lock rules found in CETA. These locks, the legal protection of which is “the most controversial part” of C-32, make it difficult for consumers to move files from one format to another, even for their own personal, legal enjoyment. The WIPO treaties in the 1990s that deal with the locks were based on consensus, Mr. Geist said, and don’t go as far as CETA.
5. If in C-32 there is a balance between content providers and consumers in terms of notice of infraction, CETA would allow for enforcement of suspected infractions of copyright. The statutory damages section is also more sever in CETA, said Mr. Geist. Where C-32 distinguishes between commercial and non-commercial infringement of copyright, capping the latter at $5,000, the EU has proposed language in CETA that would contradict this approach.
Mr. Geist concluded by repeating that copyright provisions were not part of the first Canada-U.S. free trade deal or NAFTA. Here in CETA it is about one-way pressure on Canadian law. “We shouldn’t discard a made-in-Canada approach for a Made-in-Brussels approach.”
DAIRY FARMERS
Mr. Doyle began his presentation with some stats from a recent study of the Canadian dairy sector, which estimates the economic impacts of the dairy industry on the Canadian economy using 2009 data. Milk producers make $5.4 billion worth of milk annually, resulting in sales of $7 billion. The sector employees 215,000 people, contributes $15.2 billion to GDP (including the spin-off activities), and puts about $3 billion in taxes into federal coffers. In other words, he said, dairy farmers contribute “more than profitably” to the Canadian economy.
The supply management of dairy is set up so that producers manage production to meet demand in the Canadian market. But international trade talks are important to maintaining the integrity of this system in future, said Mr. Doyle. This is where import controls are negotiated, whether at the WTO or CETA, and the dairy sector is excluded in all Canadian trade deals. This is in line with the position taken by all parties in a 2005 House of Commons motion stating that there be no over quota tariff reductions and no non-tariff quota reductions. Canada’s chief negotiator has also confirmed that his mandate is consistent with the motion, said Mr. Doyle.
“As CETA enter thte difficult phase, we want to thank them for the strong position the government has taken to oppose EU demands,” he said, adding the dairy farmers were pleased with statements from Ministers Ritz and Van Loan that they will not trade away supply management.
Still, he said, the EU continues to seek access to the Canadian dairy market, which is “not a closed shop,” as some commentators suggest. Canada imports more than 10 times the amount of dairy products from the EU than it exports there. The numbers work out to $26 million in exports to the EU, mostly in cheeses, and $217 million worth imported, with cheese representing $116 million of that. Mr. Doyle asks how Canada can be taken seriously at the WTO, where it is trying to protect supply management, if negotiators take any different position at CETA?
Another concern for the dairy farmers is the EU proposal on Geographical Indications (GI) — the names of products from specific regions granted legal protections against foreign producers making versions of the same thing. Canada has “opened the door to a negotiated outcome on GI,” said Mr. Doyle, but “we must not lose sight of the fact that the Canadian cheese industry produces hundreds of varieties of cheese” based on recipes from Europe. It will severely affect parmisan and feta cheese production, he said, suggesting the final outcome of any CETA deal should continue to allow dairy farmers to produce generic cheese in Canada and to market the new Canadian varieties, which are often produced in small quantities.
FROZEN FRENCH FRIES
The final speaker, Mr. Clow of Cavendish Farms, the fourth largest producer of frozen french fries in North America, also began with stats. Cavendish employs 700 people in PEI but has its head office in Dieppe, New Brunswick. In total, across its Canadian operations the company employs 940 people, some of them at a frozen appetizer factory in southern Ontario. Cavendish thanks the federal government for the timely conclusion of the free trade agreement with Panama, as well as the renewed push to complete a deal with the Caribbean, where there is a “huge potential for the export of frozen potato products.”
Mr. Clow said in CETA he hopes there will be an immediate and complete elimination the 14.4 percent tariff on frozen potatoes into the EU. The tariff on sweet potatoes and fried vegetable tariffs is even higher at 17.3 per cent. Export markets are important to Cavendish because only 12 per cent of its production is consumed here in Canada, with the rest going to the U.S., Latin America and Asia. Iceland imports Cavendish fries, and Canadian exports went up considerably after signing an FTA with the European Free Trade Association to which Iceland belongs, he said. (Iceland is not a member of the EU.)
Atlantic Canada stands to gain from CETA, said Mr. Clow, due to the inexpensive cost of shipping by sea. He explained it is as cheap for him to send frozen potatoes to Europe as to Chicago. The elimination of duties on french fries into Europe “will level the playing field,” he said. It will also allow Europe to enter into trade negotiatioins with the U.S., Mr. Clow added, and reinforce the comparative advantage of the PEI potato industry.
(My comment: See Mr. Geist’s statement about how trade deals could safely be about tariffs without forcing changes to Canadian regulations and laws in non-trade related areas. If Iceland dropped its tariffs without a big fight, the EU should be able to also.)
QUESTIONS FROM MPS
Generally, the Q&A didn’t produce much added information from the witnesses. Claude Guimond with the Bloc asked if any of Cavendish’s potatoes were genetically modified considering what the trade committee heard in Europe about opposition there to GMOs. Mr. Clow responded that, unfortunately, there are no GMO potatoes in North America because McDonald’s refuses to buy them. He said there are benefits to going GMO, such as having to use fewer pesticides, and he hopes that in the long term the industry revisits the technology. (…Which would cut out any chances of exporting to the EU…)
Peter Julian, NDP trade critic, asked Mr. Geist if he could talk talk about the consequences of statutory damages for non-commercial infringement and digital lock provisions. Geist responded that it should concern all of us when people burn CDs and sell them on the street, but that Canadian law already can handle that situation. CETA would also penalize the teenager downloading a 99-cent song, he explained, suggesting that teenager shouldn’t face $20,000 lawsuits each time. And the EU wants to increase the damages. Canada has put on the table that we should have different approaches to non-commercial infringement, which Mr. Geist said he prefers.
Mr. Julian also asked Mr. Clow if Cavendish Farms had done a study of the increased costs, predicted in a report last week, to Canadian employer drug plans by CETA’s patent extensions on brand name drugs. Mr. Clow said he hadn’t done such a study.
My own impression of the trade committee meeting was that MPs are keen to learn more about CETA. Some of them have more defensive concerns around protecting dairy farmers, or making sure Canada doesn’t give too much on intellectual property. Others are looking for information that they feel would help Canada strengthen its market access demands in the EU — in other words they are looking for ways to bolster the position of Canadian negotiators at the table.
John Cannis (Liberal), for example, prefaced his questions by saying that from the trade committee’s trip to Europe last year, it is clear the EU has no intention of backing down on its heavy requests. If the committee hearings on CETA continue as today’s did, it should become clear to some of these MPs at least how impossible a fair deal would be. Let’s hope they get to public services, procurement, environmental impacts and other areas affected by CETA shortly.
COMMITTEE TO PROBE ABITIBI SETTLEMENT
According to the minutes, following the presentations on CETA, the committee agreed to the following:
It was agreed, – That the Committee undertake a study on: the $130 million paid by the federal government to Abitibi Bowater as a settlement of its claim under NAFTA’s investor state provisions (Chapter 11), the impact of this settlement on future democratic decisions taken in the public interest by Canadian governments at all levels and that the Committee report its findings to the House. And that no more than two (2) meetings be dedicated to hearing witnesses on this study.
