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UPDATE: Day 1 of CETA talks

The Montreal Gazette reports that, “As Canada and the European Union kick off their latest round of trade talks, European officials are still fuming over Quebec’s decision to lock international bidders out of a $1.2-billion contract to supply subway cars in Montreal.”

“European officials say the deal sends the wrong signal on the issue that comes closest to being a deal breaker for the EU in its trade negotiations with Canada: the ability for European companies to bid on lucrative provincial and municipal contracts across Canada. …A senior European source, speaking on condition of anonymity, said Quebec’s protectionist behaviour has threatened to undermine the positive atmosphere of the negotiations.”

“With most of the non-contentious issues solved, negotiators are entering what both sides expect to be the toughest phase of the talks… Although the federal government is leading the talks, the provinces and territories are key to sealing an agreement. The Europeans have asked provincial governments to make explicit commitments to open the bidding process on infrastructure projects, such as roads and bridges.”

Meanwhile, the Globe and Mail reports that, “(Trade minister Peter) Van Loan said the provinces – which are at the negotiating table for the first time in international trade talks – have committed to open their procurement markets.”

They also note that the, “European Union trade negotiators are taking aim at the provinces’ renewable energy policies – notably Ontario’s Green Energy Act – as they seek to open up provincial procurement markets under a proposed Canada and EU comprehensive trade deal. …Other provinces, notably Quebec and Prince Edward Island, also have policies that reward renewable energy producers that purchase goods and equipment locally, but none are as aggressive as Ontario’s feed-in-tariff program, which pays high rates for wind and solar electricity but requires up to 60 per cent local content.”

“Trade experts say the green energy trade is just one of several hurdles that negotiators face as they aim to complete a deal by the end of 2011. Others include agriculture, including Canada’s quota-based dairy system; the broader provincial and municipal procurement markets; and Canada’s desire to have its service sector be treated on an equal footing with companies from European countries.”

The Canadian Press reports, “Despite opposition from labour groups and the Council of Canadians, the talks have flown mostly under the radar… Stuart Trew of the Council of Canadians said true reciprocity on procurement between Canada and the EU would be ‘impossible’ to achieve. ‘It’s going to be very difficult for Canada to get a good deal,’ he said, noting that some municipalities have expressed concern that they will no longer be able to favour local suppliers. ‘European companies are going to use this deal as a big stick to beat over the heads of our municipalities when they don’t win bids.'”

The Montreal Gazette report adds, “Teresa Healy, a senior researcher with the Canadian Labour Congress, said opening the procurement market could create pressure on local governments to privatize public-service providers, such as water utilities.”