It’s a bit late for a “look ahead” piece but better late than never when it comes to trade: 2012 will be a busy one for the Conservatives and for those of us at home and abroad hoping to replace the prevailing free trade doctrine with something more fair and ecologically sustainable. Something that works would be nice, too, since Canada’s current template FTA comes up short on jobs. Here’s a status update on the deals the Council of Canadians will be challenging this year.
CANADA-EUROPEAN UNION COMPREHENSIVE ECONOMIC AND TRADE AGREEMENT
“Historic” was the term used in May 2009 to describe Harper’s free trade negotiations with the European Union. The timeline was often called “ambitious.” Both sides predicted two years’ worth of trade talks starting in October 2009. A federal election in Canada last spring, delays in tabling provincial and EU member state offers on services and investment, and EU pressure on Canada to concede major copyright and drug patent reforms have pushed the goal line back. There’s also the reality check that it took double that amount of time for the EU to conclude a free trade agreement with South Korea. EU negotiating rounds with India are almost into double digits.
The continuing threat of a Eurozone breakup can’t be helping things much nor will they hurt since the EU and Canada will spin CETA as a way out of the crisis. The expectation is that CETA could be signed as early as February or March, according to some accounts, in some form or another. Harper will want to do this with pomp at a Canada-EU Summit whose date has not yet been set, even if a few difficult parts of the trade deal remain unfinished. A long ratification process would then begin, with EU officials predicting CETA would come into effect no earlier than the summer of 2014.
That is unless we can stop them, or the deal falls through as a previous attempt – the Canada-EU Trade and Investment Enhancement Agreement – did in 2006. In other words, it’s far too early to stop fighting this bad deal that offers Canadian communities more risks than rewards.
Resistance to CETA has been strongest in the areas of municipal procurement, pharmaceutical policy reforms, copyright and proposals to include an investor-to-state dispute settlement process as exists in NAFTA. On the first point, 36 municipal governments, school boards or associations have now passed resolutions about CETA, most of them asking to be excluded from procurement rules in the deal that will reduce economic policy options for local governments to the benefit of large multinational firms.
The brand name and generic pharmaceutical industries are at war over intellectual property rights changes proposed by the EU (and pushed constantly by Big Pharma in the U.S.). Monopolist drug firms want automatic patent term renewal if the patent renewal process goes on for (in their eyes) too long. They want five more years added to the end of patents and another right to appeal decisions to allow competing generic drugs to enter the market. Canadians already pay too much for drugs. These changes will push the price up even higher.
Meanwhile provincial governments are refusing the disclose the offers they’ve made to the EU on services and procurement – not just publicly but even to cabinet members in their governments. Meetings with non-trade related MPs confirm most provincial MLAs know little if anything about the Canada-EU trade negotiations despite it being mere months before both sides are expected to ink a deal.
Our job over the next few months is to put pressure on the provinces to come clean while continuing to convince municipalities the deal stinks from their perspective. While opening few truly new trade doors for Canadian goods and services, CETA will undermine job creation and environmental protection policies at home. It’s a net loser for Canada no matter how you spin it.
CANADA-U.S. PERIMETER SECURITY AND ECONOMIC COMPETITIVENESS ACTION PLAN
This being an election year in the U.S., it was important for Harper to announce the Perimeter Security and Economic Competitiveness Action Plan in December. Though Obama apparently protested the idea of answering questions about the deal, according to Neil Macdonald on Twitter, signalling its relative importance to both leaders, the Action Plan is now in effect, with an elaborate timeline spanning several years as detailed in Embassy Magazine last month.
The primary concern about the perimeter deal is its capacity to drastically increase the amount and type of personal information flowing across the border. More generally, the deal has been called a capitulation of security matters to U.S. control or U.S. norms. A risk to one country is a risk to the other. Responses to those risks will be harmonized.
Writing in Prism Magazine this month, Paul Cavalluzo, a constitutional lawyer who acted as lead commission counsel to the Commission of Inquiry into the Actions of Canadian Officials in Relation to Maher Arar, asks whether we should be concerned that the Canada-US perimeter deal will bring the RCMP much further into the national security game and give it more freedom to share information informally with U.S. security agencies. “You bet we should!” is his answer:
What led to Mr. Arar’s gruesome forced return to his birthplace (Syria) was the Americans acting on inaccurate and misleading information given to them ‘informally’ by the RCMP. In information they shared, the RCMP described Mr. Arar and his wife, Dr. Monia Mazigh, as being part of a ‘group of Islamic Extremist individuals suspected of being linked to the Al Qaeda terrorist movement’. There was not an ounce of truth nor an iota of evidence to support this allegation.
Cavalluzo explains that Justice O’Connor recommended:
that whenever the RCMP shares information with foreign agencies it must do so in accordance with clearly established policies respecting screening for relevance, reliability and accuracy, and in accordance with laws respecting the protection of personal information and human rights. Moreover, the RCMP should never share national security information or intelligence without attaching ‘caveats’ which give the RCMP control over such information by ensuring that American authorities must receive Canadian consent before they can share this Canadian information with anybody else or use this information for a purpose not permitted by the caveat.
Cavalluzo suggests, “Our lawmakers should clearly ensure that these minimum requirements are in any law which facilitates the sharing of information with the American authorities as a result of the Action Plan.”
This was one of the 10 principles a coalition of privacy and civil liberties advocates, including the Council of Canadians, released in early December in response to the announcement of the new perimeter action plan. You can read that statement here.
The Regulatory Cooperation Council, a joint government body also created in the perimeter security talks with Obama, is getting straight to work early this year. There is a stakeholder session planned for Washington, D.C. January 30-31 where the RCC will “seek expert advice and technical input from stakeholders to finalize work plans for the implementation of the initiatives outlined in the Joint Action Plan.”
Some of those stakeholders will be from manufacturing and other lobby groups in the U.S. who are so fed up with environmental rules at the EPA they have launched a campaign called “Say NO to NEW REGULATIONS.” Environmental rules hurt jobs, they say in the campaign material. And they can be quite influential on jobs-conscious Capitol Hill, especially in an election year where job creation is a huge priority. Regulating upwards to the highest standard is not on the menu for these stakeholders, making a race to the bottom a far more likely result from the RCC’s convergence work over the next few years.
The Council of Canadians will be taking a closer look at the regulatory aspect of Harper’s perimeter deal with Obama with a special emphasis on its likely impacts on food sovereignty, food safety and public health rules. We’ll also continue to work with privacy and civil liberties to challenge any new information sharing and security arrangements that put rights and privacy at unnecessary risk.
THE TRANS-PACIFIC PARTNERSHIP
Canadian media commentators still don’t talk much about the Canada-EU trade negotiations. But no sooner had Harper signalled he wanted Canada to join the U.S.-led Trans-Pacific Partnership talks were the same commentators rushing into the “pro” corner. This is a strange fan club indeed because there are literally no details – the entire text is secret and required to remain secret until well after a deal is signed!
The Canadian government is apparently not immune to this blackout. They have no information on what the deal looks like, though it wouldn’t be hard to guess. At the end of December a consultation was launched into the risks and benefits of the TPP. A backgrounder on the DFAIT website defers to the U.S. Trade Representative website for anyone looking for more information. The Council of Canadians will be submitting a response.
Even without a draft text we can see the threats to public policy are as considerable as in the CETA negotiations. At the top of the list are probably drug regime and copyright changes demanded by powerful lobby groups in the U.S. and Europe. Hanging over Canadian entry to the talks are also demands from New Zealand and the U.S. that Canada abandon or weaken its tariff and quota system protecting Canadian dairy, poultry and egg farmers from fluctuations in global food prices that have hammered international farmers over the past four years. Japan, another prospective TPP entrant, is similarly being asked to open up the auto sector as a condition of entry (i.e. before doing any negotiating for something in return!).
Like in CETA, participation in the TPP may require Canada to extend patent terms and data protection for Big Pharma while granting a new right of appeal against the introduction of cheaper generics. Canada has conceded drug regime changes before in trade negotiations to satisfy the U.S. lobby. Pressure on copyright reform is constant.
According to Inside U.S. Trade this month, “U.S. [Intellectual Property Rights] stakeholders … stressed that there is no coordinated effort by U.S. companies with IPR interests to keep Canada out of the TPP negotiations, although several argued that Canada is not ready to join the TPP talks in the near term… For instance, one source with an interest in copyrights argued that the gulf between Canadian IPR laws and the standard that U.S. stakeholders want TPP to establish is currently too wide. Therefore, it would be ‘premature’ to allow Canada to join the talks until Canada takes actions to bolster copyright protections, this source said.”
Micheal Geist, in his blog of January 6, listed some of the copyright changes Canada would be asked to make based on leaked versions of the TPP intellectual property chapter. There are too many to list but you can read them all here. Geist’s webiste is a wealth of information on how both CETA and the TPP would transform Canada’s digital media landscape.
All these U.S. demands, and the possible inclusion of Mexico in the TPP, have led commentators to refer to the TPP as a major NAFTA renegotiation. It would be so on Obama’s terms. For the other members in the negotiations, it is similarly U.S.-focused but in a geopolitical way. Jane Kelsey of the University of Auckland’s School of Law describes the TPP’s origins this way:
The Trans-Pacific Partnership negotiations were born when the United States, and later Australia, Peru, Vietnam and Malaysia announced they would “accede” to the P4 (a former four-country version with Chile, Singapore, Brunei and New Zealand). After some delay, the Obama administration confirmed US participation. In reality, the TPPA is the US + 8. That is not simply because the US is economically dominant in an agreement that has limited commercial value as a traditional FTA, given the extensive web of existing agreements among the parties, or because the US Congress has an effective veto over trade deals. The underlying game plan, confirmed at the November 2011 APEC meeting in Honolulu, is for the TPPA to serve as the economic limb of the US geopolitical strategy for “America’s Pacific Century,” alongside a stronger military presence, as a counterforce to China in the Asia Pacific.
Opposition to the TPP is strong in countries like Australia, New Zealand and the United States with concerns in almost all areas, from intellectual property (threat to access to medicines for developing countries), procurement and the restriction of development policy space to the benefit of U.S. exports, the risks to farmers (a particular concern in Japan, which is also seeking entry despite majority parliamentary and public opposition to the TPP), and the extension of investment protections and an investor-state dispute process for the whole region.
Australia, despite the free trade rhetoric of its trade minister, has so far refused to consider an investor-state dispute process in the TPP as it refused in its bilateral trade agreement with the U.S. in 2004. This is mainly due to an investment dispute against Australia’s plain packaging cigarette law by Philip Morris. South Korea also recently indicated it would like to renegotiate the investment portion of its free trade deal with the U.S. because of similar concerns for public policies at risk.
The Council of Canadians has joined a global coordinating group opposing the TPP and has created a new section on our Trade Campaign page to follow Canada’s request to join the negotiations.
This is one of those trade deals that shows the whole process for the sham it is. Canada has minimal economic relations with Honduras and a free trade deal can’t possibly improve them. FTAs also don’t improve human rights either, as the ongoing situation in Colombia is proving while disproving Conservative and Liberal claims that free trade is the only way to provide legitimate economic outlets for desperate peoples. (Labour Minister Lisa Raitt will be in Colombia this month to make an announcement related to the labour side agreement in the Canada-Colombia FTA.)
In fact, Harper is only legitimizing state-sponsored terror against civilians by cozying up to Honduran President Porfirio Lobo who came to power following a military-backed coup in 2009. On January 4, Canadian Press reported, “A Canada-Honduras trade deal is coming under renewed fire following a spate of abuses by police in the Central American country, including the recent beatings of protesting teachers, the intimidation of journalists and the murder of two university students.”
The article continues:
Journalists and university officials investigating the deaths of two students, allegedly at the hands of police officers, have reported being intimidated by other police officers…. In the northern part of the country the police and military have been accused of intimidation and violence against local farmers who come up against business interests.
Todd Gordon, a professor at York University who makes frequent trips to Honduras, gave a damning interpretation of Canada’s interests in the country.
“”My position, my feeling is that this trade agreement with Honduras was done because of the political climate, which includes weak laws and rights for the political opposition, the political climate is conducive to Canadian investment,” he said in the CP article. “I don’t think the Canadian government cares that much deep down about human rights in Honduras.”
NDP Trade Critic Brian Masse tells CP he’ll be recommending his party vote against ratification legislation for the Canada-Honduras FTA when it comes to Parliament this year. He suggests looking at what U.S. Congress is doing by requiring improvements to abuses of state power.
“I don’t think we should be entering into an agreement with Honduras yet, we should be benchmarking some human-rights changes, we could even look at doing that with Congress, looking at what they’re calling for,” said Masse. “Trade deals don’t automatically improve human rights.”
The Council of Canadians will be working with Common Frontiers, MiningWatch and other groups to oppose ratification of the Canada-Honduras Free Trade Agreement as we did the Colombian and Peru FTAs. We will also seek ways to block the ratification of the Canada-Panama Free Trade Agreement, which fell off the order paper during the last election and which drew much criticism at the time from the NDP and Bloc Quebecois.
INDIA, CHINA, JAPAN
Canada and India have now had three rounds of free trade negotiations toward a Comprehensive Economic Partnership Agreement (CEPA). A recent interview with Canada’s high commissioner to India, Stewart Beck, suggests the trade off is lower tariffs for Canadian automotive goods into India in exchange for better service sector access and labour mobility for Indian professionals into Canada.
There is much more vocal support in the Canadian business lobby for an India FTA than for CETA. These exporters and investors talk of securing access to a growing middle-class market. The current India government is negotiating many bilateral free trade deals with the EU, Singapore and other major partners, supported almost exclusively by industrial associations and business lobby groups. Like with any free trade deal these lobbies push the illusion that liberalization of goods and services trade leads to general prosperity when experience shows it actually polarizes wealth into a few hands and can be extremely disruptive to the lives of farmers and small business owners.
The Council of Canadians has requested a briefing from the Department of Foreign Affairs and International Trade on the status and scope of the free trade negotiations with India. It’s not clear, for example, whether the deal would include an investor-state dispute process since previous attempts to ratify a Foreign Investment Protection Agreement with India never panned out. Controversy about the deal has focused on the potential of the CEPA to increase asbestos exports to India, though recent news paints a bleak picture for the unpopular and hazardous Quebec industry.
The other priority market in Asia for Canada’s big business lobby is, obviously, China. Prime Minister Harper is there this week on a state visit and will be raising the issue of the TPP. China is increasing its investment in the tar sands while negotiating a Foreign Investment Protection Agreement with Canada that would lock in that investment and give Chinese firms the rights already enjoyed by U.S. firms under NAFTA to sue the Alberta or federal government for perceived interference with profits.
A Canadian Council for International Cooperation fact sheet on FIPA’s explains that Canada concluded 23 agreements between 1990 and 2001. Since 2007, four more FIPAs have been concluded and 20 are under negotiation or planned for the future. “The key investor protections in BITs/FIPAs restrict governments’ ability both to encourage the potential social, economic and environmental benefits of foreign investment and to minimize potential damage from such investment,” writes CCIC. “Through these provisions, BITs impose restrictions on developing countries that did not apply to developed countries in the course of their own economic development.”
For more about the Canada-China trade negotiations and a timeline, see Director of Communications and Campaigns Brent Patterson’s campaign blog from October 2011.
The idea of a Canada-Japan free trade agreement was also proposed last year with many suspecting Canada followed the country into the TPP talks so as not to let other countries beat Harper to it. In February 2011, the Conservatives announced the launch of a joint study of the feasibility of free trade with Japan. These things usually take a year, so expect the predictable result – a promotional piece supporting an FTA – in a few months. With Japan’s attention clearly on the TPP and elsewhere, don’t expect much movement on this in the near term.
AGREEMENT ON INTERNAL TRADE
At a 2011 AIT trade policy meeting in PEI, provincial ministers quietly announced plans to amend the person-to-state (province) dispute process in the Agreement on Internal Trade. The communiqué explained:
Ministers agreed to undertake a more effective enforcement mechanism under the Agreement on Internal Trade (AIT) for disputes brought by “persons” (individuals, businesses and other organizations) against a government. This dispute process allows persons to challenge a government’s actions that appear to be contrary to the AIT. The changes agreed to today include monetary penalties and the removal of dispute resolution privileges in situations of continued non-compliance by a government following a decision by an independent dispute resolution panel. These are largely based on the new process applicable to disputes between governments which was put in place in 2009.
Trade ministers also agreed to create a single electronic point of entry for tender notices in each province, putting them in line with EU demands in the procurement chapter proposed for the Canada-EU free trade agreement. The communiqué also alludes to discussions on how to more fully abide by international trade rules, stating “the Committee on Internal Trade directed officials to develop options on extending domestically, where appropriate, any benefits provided under international agreements.”
The new dispute process should be tabled at this year’s Committee on Internal Trade meeting in June in the Northwest Territories. Last June we issued an Action Alert demanding that the premiers reject new investor rights under the AIT. A coalition of Canadian organizations has been countering business lobby pressure over the past two years to include fines for investor-state disputes and allow companies to challenge government policy directly where currently there is a requirement to seek support from the host province. We’ll be monitoring the NWT meeting and reporting on what the final dispute process looks like.
At the bottom of the pile for a reason: Harper has given up on multilateralism to pursue preferential trade agreements with marginal economic benefit as well as comprehensive agreements with Europe and through the TPP. These deals typically push beyond where a majority of developing countries were willing to go at the WTO. I won’t say more than I already have in entries on December’s strange WTO ministerial in Geneva. A forthcoming joint declaration on the talks from Our World is Not For Sale begins:
The 8th Ministerial meeting of the World Trade Organization (WTO) should have seriously addressed the pressing agenda of fixing existing rules that would have provided governments with more policy tools with which to address the global food, jobs, and financial crises. The Ministerial failed to do this, instead concluding with a non-binding summary by the Chair. Although it has no legal impact, the summary nevertheless continued the WTO’s infamous history of prioritizing the agenda of the 1%, while diminishing the overwhelming demand of developing countries to focus future negotiations on a positive 99% agenda of transforming global trade rules.
With respect to the regulation of financial services – a priority since the 2007/08 crash – the OWINFS statement says:
given the global agreement on the need for increased public oversight of the financial sector, public interest groups demanded that governments abandon current proposals for further financial liberalization in the WTO. Instead, they called for existing and proposed GATS rules to be reviewed in light of the financial crisis, and then clarified and/or modified in order to ensure policy space for all countries to use policies, such as capital controls and financial transaction taxes, as well as to implement other financial regulatory and prudential measures. We voice our support for similar language that was included in a proposal by Ecuador in advance of the Ministerial. Although it received support from a diversity of developing countries, the language was not included in the agenda due to opposition from the United States, the EU, Australia, Canada, Korea, and Norway, among others.
So we see even more obstructionism from Canada on a positive reform while our trade minister, Ed Fast, joined other mainly OECD nations in a hot-air-filled Pledge Against Protectionism. Maude Barlow, national chairperson of the Council of Canadians, had this to say about the pledge:
Fresh from pulling out of the Kyoto Accord and essentially abandoning global efforts to save the planet from climate change, the Harper government is again turning its back on developing countries at the WTO. The so-called pledge against protectionism, which includes a standstill and rollback on pro-active economic policies, only further undermines the efforts of poor and developing countries to make the global trade system work for them.
A multi-country civil society statement included this criticism:
Far from reorienting the actual unfair and unbalanced trade rules which favour trade concentration in the hands of a small number of transnationals and the primarization (sic) of exports based on the growing and irrational exploitation of human and natural resources from the South, these countries are creating a smoke screen to hide the consequences and negative influence of actual trade rules that deepen poverty, inequality and the crisis peoples are confronting.
When we say Canada is undermining the WTO it’s only in reference to these attempts by the majority of the world’s countries to make trade rules work for them, too. Canada is happy to support the existing WTO restrictions on government policy by challenging the EU’s seal product ban and threatening to take the EU before a dispute settlement body if its new Fuel Quality Directive passes with a higher carbon value for tar sands than for conventional oil, which it factually is. The thing is facts like this often don’t matter at the WTO.
The organization’s record for knocking down public health, environmental or health measures is formidable. In 2010, the United States suffered three such decisions from the WTO Dispute Settlement Body: on Country of Origin Labelling for meat (where Canada and Mexico were the challengers), on a voluntary “Dolphin-safe” tuna label that was declared illegal, and on a ban on flavoured cigarettes which was found to discriminate, if unintentionally, against Indonesian cigarette companies. See a Public Citizen press release linking the three cases.
The Harper government is probably pleased, also, that the EU has now joined Japan in challenging the Ontario Green Energy Act. German and Japanese solar and wind power component firms claim the policy is discriminatory and therefore an illegal trade barrier because of local content quotas which must be met by power suppliers in order to qualify for high feed-in tariffs for clean energy. The EU has also been trying to dismantle the Act through CETA negotiations, though the Ontario government is resisting.
Keep an eye on this one. Environmental and labour groups who banded together to support McGuinty’s green energy plans will have to defend it or risk losing the policy altogether. If the WTO doesn’t knock it down, Harper might ask Ed Fast to roll it back as his “pledge against protectionism” demands.