The negotiations over a Canada – European Union trade agreement may be approaching the final stretch as both sides say they plan to wrap up the CETA talks by the end of the year. The parties have apparently reached agreement on roughly 75 per cent of the text, but the last quarter will require significant political compromise.

My weekly technology law column (Toronto Star version, homepage version) notes that Canadian negotiators recently advised that there remains a sharp divide over issues such as investment rules, financial services, and taxation. Given the ongoing European financial crisis, these issues are particularly sensitive and will raise questions about how much risk the government is willing to assume in order to strike a deal.

The most contentious issue, however, is likely to be the intellectual property chapter. The revelation that provisions from the Anti-Counterfeiting Trade Agreement may sneak their way into CETA generated widespread headlines throughout Europe last month with politicians and activists expressing exasperation at the clumsy attempt to secretly revive an agreement that was roundly rejected by the European Parliament.

The Canadian opposition to the chapter will come from European demands for patent reforms that could result in billions in additional health care costs due to higher pharmaceutical prices. The pharmaceutical demands are one Europe’s top priorities, but Canada has thus far refused to counter the EU proposals, creating a stalemate that has dragged on for years.

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