The reason for the omissions are essential to understanding one of the primary sticking points with CETA. While the government says the deal is 75% completed, negotiators have consistently indicated that they left the toughest issues to the end. Those include rules of origin, agriculture, immigration and visa issues, and intellectual property.
The CETA intellectual property chapter leaked in 2010, revealing that the EU is seeking a complete overhaul of Canada’s IP laws. Initial demands on copyright included:
- compliance with WIPO Internet treaties
- extension of the term of copyright to life of the author plus 70 years (Canadian law currently at life plus 50 years)
- additional copyright term extensions for audiovisual works, anonymous works, and unpublished works
- term of copyright for broadcasts for at least 50 years (Canada wants to limit to wireless broadcasts, while EU wants it to cover everything)
- greater transparency for copyright collectives
- new resale right for works of art
- new exclusive right of fixation for broadcasts (Canada wants to limit to wireless broadcasts, while EU wants it to cover everything)
- new exclusive right for broadcasters for retransmission in public places (ie. new fees for bars and other public places)
- new distribution right
- extension of the reproduction right to performers and broadcasters
- extension of the communications right for performers, phonogram producers, film producers, and broadcasters.
- anti-circumvention rules including provisions against devices that can be used to circumvent digital locks
- protection for rights management information
While some of these demands may have changed during the negotiations – the negotiations are still shrouded in secrecy – the agreement would clearly require reforms that go well beyond Bill C-11 (which the government says strikes the right balance). The agreement also includes major reforms to IP enforcement, trademarks, patents, and geographic indications.
In June 2011, a Trade Sustainability Impact Assessment funded by the European Commission was released. That report included the following analysis on the impact of the IP provisions on Canada:
- IPR-related provisions of CETA could have, at best, a minor positive impact on Canadian growth. Depending on their specific content, they could even have an adverse impact on the Canadian economy.
- The impact of IPR provisions in CETA on overall employment is likely to be minor.
- The Canadian trade balance would not necessarily benefit from IP provisions in CETA. Trade in specific goods, that are currently freely marketed and exported from Canada, could be adversely affected. For example, several Canadian companies brand and export their products with labels that could be considered as European geographical indications. These companies could lose market shares in domestic and foreign markets if they are forced to abandon their commercially significant labels. In sum, both Canadian exports and imports might be slightly and negatively impacted, but only in specific sectors.
- it is very likely that the CETA will worsen the Canadian deficit in its balance of royalties and license fees.
- the public sector, as a consumer of IPR-protected goods, might face additional spending, notably for educational books (educational institutions accounted for 23.4% of book sales revenues in Canada) and pharmaceutical products (the public sector finances 45% of prescribed drug expenditure).
It is not only European analysis that has found significant new costs associated with CETA for Canada. The Drummond Report on the Ontario economy included the following dire warning about CETA:
The outcome of the negotiations for a comprehensive free trade agreement with the European Union could have significant impact on the cost of prescription drugs in Ontario. A key negotiating point, the extension of Canadian patent protections for pharmaceutical drugs to European standards, could cost Ontario taxpayers up to $1.2 billion annually ($551 million for the Ontario government and $672 million for the private sector), thus wiping out gains from recent drug reforms. The province should work with the federal government to ensure that a CETA does not undermine Ontario’s interest in expanding the use of generic drugs.
Given these studies, it should come as no surprise that the government’s CETA blitz conveniently omits discussing the enormous negative impact the IP provisions will have on the Canadian economy. They also help explain why the Standing Committee on Canadian Heritage recommended last year that the government “ensure that domestic copyright policies are not part of any present or future trade negotiations.”