Toward Canada-Europe trade. Incoming flack.

All the hard decisions have been put off to now, and now all the hard decisions are being made

by Paul Wells

Breakfast at an Ottawa hotel this morning with an official from a European Union member country, who summoned the scribes to explain his country’s view on the euro crisis. We listened politely and then Simpson asked about Canada-Europe trade talks. This European fellow was surprisingly chipper. (If you’re coming late to the Canada-EU trade talks, start here for a stroll through my blog and column archives on the topic.)

Here’s what our breakfast host said:

Talks have progressed since 2009, and are in the home stretch, with hope for a signed agreement in 2012 (Stephen Harper promised such a deal for 2012 during a Halifax campaign stop during the 2011 campaign). All the hard decisions have been put off to now, and now all the hard decisions are being made. A few will probably go to direct political negotiation between Harper and whoever will be in charge of Europe when the file gets kicked up to their level. But for now, it’s still officials in negotiating teams from both sides of the Atlantic, and here are the (entirely predictable) sticking points:

• Rules of origin. A rule saying products made in Canada will get the same treatment as products made in the European Union won’t help, say, Canadian carmakers at all, because auto production in North America is continentalized. Europe wants to keep Mexican and American products out, but a Canadian-made car is substantially a Mexican and American-made car. The solution? A derogation from rules of origin for specific sectors, or a quota to allow X amount of imports in spite of rules of origin.

• Pharmaceuticals. This story will bring you up to speed on the IP gap between Canada and the EU on pharmaceuticals. It’s not obvious what the outcome would be, although one strongly suspects Canada would extend patent protection for big pharma, something generic drug manufacturers wouldn’t like.

• Geographical indicators. The EU doesn’t want any Canadian trying to sell something called “Parma ham.” They may not even like a little Italian flag on a jar of sauce. More here.

• Government procurement. This is a huge area of dispute because the potential gains for European manufacturers are substantial, and the potential pressure they could put on Canadian providers is equally large. This is the notion that each side should be able to bid for government contracts at every level in the other market — and be treated as a local. So Alstom could bid for Toronto subway contracts, and Wernham Hogg could bid for Edmonton stationery contracts.

Here, surprising language. On the Canadian negotiating team’s procurement offer, “Europe recognizes that this is the boldest and most far-reaching proposal that Canada has ever produced,” our source said. I say, good: the competitive pressure that would drive Canadian productivity gains would come from forcing domestic suppliers to compete openly with European suppliers. You won’t be surprised to learn that a lot of people really don’t like that idea. See below.

Those are the four outstanding points. Hey, what’s not on that list? You’re right: agriculture subsidies. Probably supply management and the forest of EU farm subsidy programs would stay in place, but each side would offer a quota for imports from the other in defiance of local subsidy regimes. So Canada would allow X amount of French cheese in, duty-free, and Europe would take Y amount of Alberta beef.

Two years ago, lead EU negotiator Mauro Petriccione, told a Canadian audience that Europe could not sign a merely symbolic trade agreement. They’d rather walk away than set a low bar for future negotiations with frankly larger and more lucrative markets than Canada, he said. Is there any chance there won’t be a deal now, I asked? The official said he’s increasingly sure there will be agreement on a “substantial” deal between the two sides.

And yet. There sure is a steady drumbeat of Canadian opposition to the so-called CETA deal between Canada and Europe. The Council of Canadians has got dozens of municipal councils across Canada to pass resolutions asking to be excluded from the terms of CETA. Here’s a story about one such effort in Moose Jaw.

The NDP is pushing hard on the generic-pharma message. Letter-writing campaigns are brandishing all sorts of scary notions.

Meanwhile, the only sustained pro-CETA campaign comes from the Canadian Council of Chief Executives and a bunch of pharma organizations. I find their effort too clever by half: under the rubric “Protect Health Care,” it attempts to turn the trade dispute into a fight over the quality of Canadian health care.

As CETA gets closer and closer to reality, will all those town councils be able to push back? It’s hard to believe they could, but so far CETA’s opponents seem more organized and vocal than its supporters.

 




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Toward Canada-Europe trade. Incoming flack.

  1. It means $12B coming into Canada.

    Are we free-traders or not?

    Pitter patter, let’s get at ‘er….as they say.

    • Conbot!

      • Well, that comment makes no sense at all.

    • If this article – and others I have read – are any example of what we can expect, then we should run away, fast and far. There’s a difference between free trade and letting other nations control us. We have to rename our food products? We have to give more money to Big Pharma?

      You mention $12B coming in – how much will we lose in other sectors? If you are talking net gain, how / where do you get that figure?

      If NAFTA is any indicator, a FTA only works until our larger trading partner doesn’t like something – at which point they throw up a tariff wall and blithely ignore our negotiations, our wins in tribunals, etc.

      Give me a detailed explanation of how we will gain, along with evidence that flaws in past FTAs have been recognized and addressed, and you might win me over. I’m not completely against trade agreements; it’s just that the handful of articles I’ve stumbled upon that address this one at all have uniformly left me feeling like we are getting sold out.

      • Trade is trade….and Canada was born and continues as a trading nation.

        We should not let our small-town paranoia stand in the way.

        Re-naming food products is no big deal….in fact most of it has already been done.

        For example, ‘Champagne’.  It comes from the Champagne area of France….so we can’t name a sparkling wine made in Canada ‘Champagne’.  Nor can we call something ‘Devon cream’ when it’s clearly not from Devon England. They are brand names.

        The figure of $12B comes from our govt….that’s what they estimate the deal to be worth to Canada. Since I’m not involved in the negotiations, I don’t know what all is in or excluded.

        I’m not trying to ‘win you over’.

        Our major trade partner is in a mess, and we need to trade with other countries, and not have all our eggs in one basket.

        So we need to have trade deals with Europe, India, China etc.

        • Read the GI link Wells provided. Any agreement that seeks to control everyday language use (terms like parmesan, feta, mozzerella to describe cheeses would be banned unless the cheeses actually come from there) clearly intrudes into our lives more extensively than any trade agreement to date.

          We complain about the loss of sovereignty to the US over the perimeter security agreement; this makes that look mild by comparison.

          Trade deals, sure, as long as there is a real benefit; abject surrender of our sovereignty for a little extra cash (and $12B isn’t that much, really) – absolutely not. If this goes through with the things Wells says the EU wants, Harper should be charged with treason.

          • I have read everything on the agreement ever printed.

            Now stop being silly.

          • That contradicts your earlier statement about knowing where the govt got its $12B figure. If you have read everything then you ought to know. Stop with the bs. If this is such a good deal then back your claims rather than just pooh-poohing anyone who raises concerns.

          • @KeithBram:disqus 

            That’s a govt figure from a media report. I have followed this story from the beginning.

            However, it doesn’t matter what you think about it.  Eventually, when it’s all worked out and signed, you will be notified by headline.

          • “it doesn’t matter what you think about it. Eventually, when it’s all worked out and signed, you will be notified by headline.” Good God, Emily! You’ve turned into a ConBot! That’s the kind of statement I’d expect from the True Harperites. On the other hand, dodging the question IS true to form for you. I’m done on this one. ‘Til next time! Subject: [macleansca] Re: Toward Canada-Europe trade. Incoming flack.

          • You were done on this one during your first post.

            You know as well as I do that trade negotiators are handling it, and that the public will hear about it after it’s signed.

            Same as with all our other trade agreements.

  2. “Europe wants to keep Mexican and American products out, but a Canadian-made car is substantially a Mexican and American-made car. ”

    Fiat own Chrysler after it bought controlling stake from Canadian and American governments, Mercedes produces quite a few vehicles in Alabama and argy bargy now between China and US and EU about vehicles/tariffs. 

    I am always in favour of more trade but it is hard to be sanguine about future of united Europe at moment. How certain can we be EU exist in 2 years? Existential issues within EU so I would be surprised if trade deals get signed any time soon. 

    Wells, you one of few journos who covers free trade issue. Free trade debate in 87/88 was passionate and made people crazy but now people barely talking about it. I am glad that free trade is not controversial but I would still like to know what is being negotiated.  

    I work for american consulting firm that mainly does work for Japan auto makers operating in north america and technology, supply management systems and other forces have already created global market. Globalization has created need for free trade rules between continents, in some ways countries making rules to make official what has already happened between businesses. 

    Canada and EU have mutual interests to keep agriculture off table – Common Agri Policy is mammoth boondoggle and impossible to reform.

  3. Not surprised that big mouth Maude Barlow is involved.  She managed, with the help of CUPE to scare Abbotsford, BC into voting no to P3 for their Stave Lake water project.  Now they are stuck having to raise the money themselves.

    • She’s still waiting for the Americans to steal Lake Superior!

    • If the experience we had in Brampton with our P3 hospital (thanks to Gazebo Tony) is any indication, they were very smart to say No. Tony’s “brilliant” plan gave us a hospital with far fewer beds, at much higher cost, than the city needed. Compariso between costs of our hospital vs a similar hospital built in another Ontario community around the same time using the “traditional” model shows we were ripped off big time.
       
      Not saying P3 can’t work; it’ just that I have yet to be made aware of any examples where it did.

      • Here is a study by UBC on 10 P3 projects.  The one I thought of right away was the Confederation Bridge to P.E.I.  Seema to be pretty honest about results.  The most successful appear to be large construction and technology innovation that do weel from private involvement.  Projects that require greater on-going operational expertise fair less well.  Our B.C. Fast Ferries were a classic for government waste – nearly half a billion to build three shipss – ended up selling them for less than $20 million as they didn’t work as they were supposed to.

        http://csgb.ubc.ca/files/workshop06/Research%201-Vining.pdf

        My beef with the Abbotsford situation was the activists were calling people and saying they would no longer own their water and the taps could be shut off if private companies were involved.  Also Walkerton was alluded to – scare tactic.

  4. A trade agreement is not free trade. It’s managed trade. And it’s always
    useful to try and interpret who it’s managed for and why.

    • We don’t have free trade, in the technical sense, with anybody.

      But we won’t get there by refusing to trade at all.

    • Yes, it’s managed for the Bilderberg Group, the Freemasons and the alien lizard-people who secretly inhabit the bodies of our business leaders and politicians.

      • Oh, man… you spilled the beans, and now we gotta kill ya…

  5. “AbitibiBowater was able to extort $130 million out of the federal government in a NAFTA (North American Free Trade Agreement) settlement that ignored any obligation the firm should have to pay its former workers or clean up its environmental mess.
    The Swedish, state-owned power company Vattenfall recently settled a claim with Germany related to environmental and health regulations. When the city of Hamburg required Vattenfall to build its coal-fired power plant according to water and environmental protection rules determined shortly after initial construction had begun, the firm used the European Energy Charter to bring an investment dispute against Germany. It settled with the company for an undisclosed amount.
    Now Vattenfall is challenging the German government’s about-face on nuclear power following the Japanese meltdown. They are asking for over 1 billion compensation for the decision to phase out nuclear power. The proposed investor-state chapter in CETA allows transnational corporations to use this trade agreement where possible to undermine climate and public health measures, or anything else that gets in the way of profits.”

    This may not represent the whole storyline, but nevertheless we should seek safeguards against Corporate bullying.
    I’m reminded of the introduction of TIMLA in to BC[ where is that at now?]. Most reasonable people could agree that whatever the benefits of globilized free trading, it has no right to automatically trump local enviro regulations or national self interest as expressed by democratic process. On the face of it most of these issues have the reek of a corporate mafia shakedown about them. Perhaps this wasn’t the intent but is sure quacks like a duck to me. 

  6. Typically in free-trade agreements, the beneficiaries greatly outnumber those negatively affected.  Unfortunately, people tend to be more vocal about things they’ve had that they stand to lose, than things they can gain.  So the opponents make more noise.

  7. Government procurement. This is a huge area of dispute because the potential gains for European manufacturers are substantial, and the potential pressure they could put on Canadian providers is equally large. This is the notion that each side should be able to bid for government contracts at every level in the other market — and be treated as a local.

    European Gazebos!  I never could quite figure out how that one cost $100k, which no one questioned.

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