UPDATE: Canada-EU In ‘Intense’ Talks On Free-Trade Deal – Trade Minister
By Paul Vieira | February 28 2012 | WSJ
–Canada trade minister said Canada, EU in final stages of trade deal
–Trade deal would “dramatically improve” Canada’s economy
–Federal and provincial trade ministers had “frank” talk on TPP
By Paul Vieira Of DOW JONES NEWSWIRES
OTTAWA (Dow Jones)–Canada’s Trade Minister, Ed Fast, said Tuesday that Canada and the European Union are engaged in “intense” and “well-advanced” negotiations on a free-trade deal, with completion targeted by the end of the year.
He made the comments to reporters following a meeting with trade ministers from Canada’s provinces and territories, adding the federal and provincial governments agree the top priority is finalizing the free-trade pact with Europe.
“There’s no doubt that negotiating a free-trade deal with the EU will dramatically improve Canada’s prosperity,” Fast said, arguing the final deal could be “ambitious.”
He said negotiators have completed nine rounds of talks, and now officials are in “intense” discussions about finalizing outstanding issues. The sooner the EU deal is concluded, the more resources Canada can deploy toward opening new markets for Canadian businesses, especially in Asia, Fast added.
Canada is presently the EU’s 11th-most important trading partner, accounting for 1.6% of the EU’s total external trade, according to the latest trade data. Meanwhile, the EU is Canada’s second-most important trading partner, after the U.S., with a 10.5% share of its total external trade.
Fast also said he had a “frank” discussions with the provinces about Canada’s potential entry into the Trans-Pacific Partnership talks. He said the ministers recognized that the opening up of new trade markets, as envisaged through the TPP, would benefit the Canadian economy.
Prior to last November’s Hawaii summit for members of the Asia-Pacific Economic Co-operation group, Fast said Canada was prepared to join the U.S.-led TPP discussions but wasn’t yet convinced of possible benefits. At the summit, Prime Minister Stephen Harper announced Canada’s intention to apply to join the talks, after Japan and Mexico signaled their interest.
-By Paul Vieira, Dow Jones Newswires: 613-237-0669; paul.vieira@dowjones.com
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Canada says EU free trade talks may drag on
By David Ljunggren for Reuters| February 28 2012 | Financial Post
OTTAWA — Talks on a free trade agreement between Canada and the European Union may take months longer to complete than initially planned as Canada seeks the best possible deal, Ottawa said on Tuesday.
The agreement is particularly important for Canada, which is seeking to diversify exports away from the giant U.S. market.
The two sides still have to settle contentious issues such as whether to amend Canada’s Patent Act to give more protection to European drug firms, a move the Canadian generic pharmaceutical industry opposes.
The predicted date for a conclusion to the negotiations has changed several times. Canadian officials and EU diplomats said earlier this year that the talks should be completed by the end of summer 2012.
Canadian Trade Minister Ed Fast said on Tuesday his goal was to wrap up the talks by the end of the year, while conceding they could continue for even longer.
“We always said we were hoping, and it was our aim, to complete negotiations in 2012,” he told a news conference.
“One thing I don’t want to do is put an arbitrary time line on our negotiations,” he added. “We need to negotiate the very best agreement for Canada and if that takes a couple of extra months, so be it.” He declined to give details on how the talks were going.
In December 2010, Canada’s then trade minister said he hoped the deal would be completed by the end of 2011.
For Canada, the pact would be the biggest since it signed the landmark North American Free Trade Agreement with the United States and Mexico in 1994. Ottawa says a treaty with Europe would increase two-way trade by 20%.
Canada-EU bilateral trade in goods totaled $77-billion in 2010, while Canada-U.S. trade totals $556-billion.
Officials said last October they needed to settle disagreements on issues such as investment protection, intellectual property, access for agricultural goods, and opening up local and national procurement markets.
Fast said Canada’s negotiators “will defend Canadian interests and they will only sign off on items that are clearly in Canada’s best interest”.
He added that Canada’s Patent Act — a major sticking point — had not yet been discussed in the latest round of talks. Pharmaceutical industry representatives last week expressed frustration at what they said was slow progress on the file.
© Thomson Reuters 2012
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Canada-Europe trade deal prohibits provinces, municipalities from favouring local bidders on contracts
By Linda Diebel | February 24 2012 | Toronto Star
An impending trade deal with Europe is ringing alarm bells across the country.
Under the deal, Canada has agreed to European demands to prohibit municipalities and provinces from offering incentives or otherwise favouring local bidders on procurement contracts.
The effects on Toronto could be serious:
Could the TTC still impose Canadian content rules for its vehicles if faced with a European trade challenge? Could the city continue to ensure certain construction projects hire youths from priority neighbourhoods? Could the city still award food procurement contracts to support local farmers?
A special report by city manager Joseph Pennachetti and obtained by the Star raises red flags about its consequences.
And last week, Toronto’s executive committee, armed with the report, asked Ontario to ensure municipal procurement needs are preserved under the trade deal. It thereby joined 34 towns and cities across Canada that filed similar protests — some seeking outright exemptions.
“We are alarmed,” said city councillor Michael Thompson, an executive committee member.
“We want to take a position that supports free trade (but) we don’t want to see our economic independence impacted in a negative way,” said Thompson, adding that the committee’s biggest concern is that it doesn’t understand the process.
Under the draft agreement, any contracts above $340,000 for goods and services and $8.5 million for construction would be subject to challenge if a European company thought it was being excluded.
Stuart Trew, a Council of Canadians trade campaigner, says the U.S. government and states always carve out protection for “Buy America” policies in their trade deals. “But in CETA, ‘Buy Canada’ simply disappears over the low thresholds – which seems like a big thing to throw away forever.”
Councillor Glenn De Baeremaeker, who sought a full exemption, argues the deal jeopardizes Toronto’s economic future: “There’s a Trojan horse outside city hall, it’s being invited in and we have no idea at all what’s going to happen.”
The pact is called the Canada/European Union Comprehensive Economic and Trade Agreement (CETA) and its scope is unprecedented. The previous comprehensive deal signed by Canada, the U.S. and Mexico (NAFTA) covers only federal procurement.
This time, Europe was “determined” to open up all levels of government, according to the Feb. 2 Pennachetti report. The deal accesses “ABCCDs” — the city’s agencies, boards, commissions, corporations and divisions. They include the TTC, nursing homes and the water system. And the same rules also apply to provincial agencies for the first time.
It may already be too late for exemptions, according to Ontario Economic Development Minister Brad Duguid.
“The challenge with exempting municipalities is that, once you start, you might exempt your way right out of an agreement . . . . It’s a slippery slope and not something I would contemplate doing.”
Talks began in 2009 and officials completed their ninth and apparently final round last October, with the agreement expected to be signed by summer.
“The ultimate implications of CETA are difficult to predict,” says the Pennachetti report. “This is particularly true given that offers have not been made public and there has been very little analysis shared by federal negotiators about the specific Canadian industries or labour force members that would benefit.”
Concerned citizens across the country have banded together to fight the deal. They include municipal politicians, activists, farmers, environmentalists, economists, students, teachers and students.
In Noëlville, in the French River region of Ontario, Lise Dupuis supports her council’s decision to seek an exemption. For her, it’s deeply personal. She says her great-grandfather was a co-founder of the caisse populaire in an area where coureurs des bois once travelled. It’s important to buy and hire locally, she says, and ensure residents have control over their own development in such a beautiful environment.
Brian McHattie, a Hamilton councillor who spearheaded a successful exemption motion, argues cities will lose their ability to control local hires and value-added benefits. He sees “large European firms coming in and bidding against us on infrastructure projects or sewage treatment plants and that’s a hugely unfair advantage.”
In Sackville, N.B., Merrill Fullerton fought as a rookie councillor for exemption from CETA because he says growing globalization, including more than two decades of trade deals, left his city without foundries and many blue-collar industries. He doesn’t blame trade deals alone, but sees a pattern of people pitted against global giants — and losing.
International Trade Minister Ed Fast was not available for comment. But an aide sent an email: “With one in five Canadian jobs generated by trade, we will continue to deepen our trade and economic ties with high growth markets to set the foundations for long-term economic growth in Canada.”
The Pennachetti report says the deal could provide significant new markets, but that strategies must be in place to ensure “the agreement delivers on promised benefits.”
It says a Canadian/European study estimates a comprehensive deal will result in an annual GDP increase of $15.6 billion (Canadian) for the EU and about $11 billion for Canada
Public policy lawyer Steven Schyrbman condemns the secrecy behind this latest deal in Ottawa’s brisk march of successive trade and investment deals that also include, talks with China and Japan, along with broader agreements with Pacific nations and more deals with the U.S. under the umbrella of North American Perimeter talks.
“The whole thing is just outrageous,” he said. “What possible justification can they have for doing this all in secret, hidden from their own citizens? It’s tantamount to writing a new economic constitution for the country and Canadians are being kept out of it.”
The Pennachetti report examines “municipal considerations” at risk to trade challenges, including:
• Toronto’s “value-based procurement” that mandates that “certain construction projects hire and provide apprenticeship hours to youth from priority neighbourhoods.”
• Toronto’s local food procurement policy to “reduce the greenhouse gas emissions associated with the provision of food purchased for city operations and facilities, plus support for local farmers.”
• The TTC policy that states that transit vehicles procured using any sources of provincial funding must have 25 per cent Canadian content, in accordance with provincial requirements.
• Strategic procurement that’s used to help strengthen and expand Toronto, Ontario and Canada-based companies by “pulling” locally developed innovative services into the marketplace, helping create local jobs and expand the tax base, i.e., Ontario’s feed-in tariff program to develop renewable energy that contains a local manufacturing content.
Trade disputes go to arbitration panels, not the courts. The report questions whether a challenge under the dispute settlement mechanism would shut down all procurement on a construction project in Toronto.
De Baeremaeker says CETA invites European multi-nationals to ignore a city’s attempts to impose local incentives because they’re toothless.
For instance, he asks what would happen to a municipal ban on selling bottled water at city events if a big European bottler appeared on the scene.
Municipalities have no place at the bargaining table and must rely on the provinces.
The agreement goes beyond public procurement to include investment and services, intellectual property rights, dispute settlement, sustainable development (labour and environment) and regulatory cooperation. It gives European companies equal treatment with Canadian companies.
Osgoode professor Gus Van Harten, an expert in international investment law, says it’s understandable the Pennachetti report cites growing opposition to the accord. “This deal isn’t an issue of left or right, particularly after the Caterpillar shutdown,” he said by phone from Burlington. “That was a wake-up call. I know people in Burlington, very conservative people, and all they care about is whether their kids will have jobs.”
Van Harten believes it’s vital Canadians understand that dispute settlement in trade disputes “trumps Canadian legislatures and courts and are all-powerful . . . It’s been my experience their interests lay on the side of the investor.”
This is particularly worrisome, he says, because Canada doesn’t have the best reputation for fighting back when challenged by big companies. Ottawa paid Abitibi-Bowater $130 million rather than face a challenge under a NAFTA panel for lands, timber and water rights the company claimed they owned when they were expropriated by the Newfoundland government.
As a professor at the London School of Economics, he learned the motto for a business conflicts: “Whatever you do, don’t pull a Canada.”
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What is CETA?
At a summit between Canada and the European Union in October 2008, a group of corporations gave government officials a “wish list” — things they wanted to see in CETA, The Comprehensive Economic Trade Agreement. This set the official bargaining agenda for the CETA trade talks. CETA is different than other deals. Things we don’t normally think of as trade items are the bulk of the deal. Canada’s public infrastructure — water, health care, and municipal services — will be bargained in part or whole with corporations if CETA is not stopped. Cultural entities such as our Canadian Public Broadcasting system and Canada Post are also at risk. Why has CETA been withheld from the press? Canadians have a right to know about the contents of this far-reaching contract.
CETA References