International Trade Minister Chrystia Freeland has faced a challenging week given the possible collapse of the trade agreement between Canada and the European Union. Freeland and the Liberal government have worked hard to get CETA to the finish line with some changes to the investor – state dispute settlement rules (the rules should be dropped altogether) and frequent travel across Europe to garner support for the deal.
Back at home, the reaction to the CETA problems from the Conservative opposition has been embarrassing. Trade critic Gerry Ritz criticized Freeland, speaking of the need for adult supervision and calling on the government to get the job done. Freeland rightly called him out on the comments, but she could have also noted that the record suggests that it is the Conservatives that failed to get the job done on CETA. In April 2010, the Conservative government said it would be finished in 2011. In 2011, reports said it would be done in 2012. In October 2012, the projection was a deal by year-end. It took until the fall of 2013 for a ceremony marking an “agreement-in-principle”. That too proved to be premature as there was another event celebrating an official draft in 2014 followed by more legal drafting and the renegotiation of controversial ISDS provisions that led to the release of another text earlier this year. In other words, Freeland inherited far less than advertised on CETA and the Conservatives might not want to remind the public that their biggest trade accomplishment never actually involved a signed, final text.
The Ritz remarks have attracted attention, but comments yesterday from Prime Minister Justin Trudeau may have a longer and more damaging impact on Freeland.
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The seeming collapse of the trade agreement between Canada and the European Union (CETA) has created obvious disappointment for International Trade Minister Chrystia Freeland and the entire Canadian government, which made the deal as its top trade issue. Efforts to salvage CETA will undoubtedly continue, but my Globe and Mail column points out that the underlying problem with the agreement is not the complicated European political system that requires support from all member states.
Rather, it is the expansion of trade negotiations from agreements that once focused primarily on tariff reductions to far broader regulatory documents that now mandate domestic legal reforms and establish dispute resolution systems that can be result in huge liability for national governments. This enlarged approach to trade deals, which can also be found in the controversial Trans Pacific Partnership (TPP), run the risk of surrendering domestic policy choices to other countries or dispute tribunals.
If CETA were limited to tariff reductions, it would be relatively uncontroversial. The discomfort with the agreement lies instead in the mandated changes to domestic regulations and the creation of investor – state dispute settlement mechanisms that may prioritize corporate concerns over local rules.
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International Trade Minister Chrystia Freeland has walked out of talks aimed at addressing Belgian opposition to the Canada-EU Trade Agreement, stating:
I have personally worked very hard, but it is now evident to me, evident to Canada, that the European Union is incapable of reaching an agreement – even with a country with European values such as Canada, even with a country as nice and as patient as Canada. Canada is disappointed and I personally am disappointed, but I think it’s impossible. We are returning home.
Leaving aside the odd reference to how nice Canada is, this is remarkable language that lays bare the obvious frustration and disappointment for the government which prioritized the CETA agreement above all others. The prospect of the deal falling apart has been evident for months. I wrote in July that the agreement was in more trouble than the Canadian government would admit, noting that opposition from any national or regional government could kill CETA altogether. Canadian officials downplayed the risk, but it was obvious that CETA faced stiff opposition that would not be easy to overcome.
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The Canadian government has characterized the proposed trade agreement between Canada and the European Union (CETA) is its top trade priority. The deal would increase trade by removing tariffs from many products, but also create significant costs. The implications for digital and intellectual property issues are particularly important, with chapters on e-commerce and telecommunications services, an extension of patent protections for pharmaceutical drugs could raise health care costs by millions of dollars, and protections for hundreds of geographical indications may restrict Canadian producers of common cheeses, wines, and meats.
My weekly technology law column (Toronto Star version, homepage version) notes that the substance of CETA merits debate, but its most distinguishing feature during the seven years of negotiations has been the steady stream of unrealistic claims from Canadian officials about how close they are to concluding the deal.
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As the Canada – EU Trade Agreement faces mounting opposition in Europe, it is worth looking back at the late stages of CETA negotiations that occurred after an October 2013 announcement that a deal had been reached. That announcement did not include a release of the text, which was still the subject of months of negotiations. In fact, long after the initial announcement, there were reports that European concerns with investor-state dispute settlement provisions were about to derail the entire agreement. By July 2014, it was obvious that CETA was in jeopardy. In August 2014, there were more assurances from the Canadian government about an agreement, but still no text. That same month, the agreement finally did become public, but only after a German public television leaked it online.
Documents obtained under the Access to Information Act show that Canadian government officials scrambled to respond. While the official line will be familiar – “Canada does not comment on the leaks of purported negotiating texts” – internally, officials were left scrambling as the agreement leaked in real time. In fact, after learning that additional appendices and materials had leaked online, Canadian official joked that “they’re scanning as fast as they can.”
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