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Canada EU Free Trade Update |
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 Negotiations towards a free trade agreement between Canada and the EU are well underway.
Negotiations between Canada and the European Union toward a Comprehensive Economic and Trade Agreement (CETA) are well underway, with the second round of negotiations held in Brussels in mid-January 2010. I.E.Canada, in partnership with the Department of Foreign Affairs and International Trade (DFAIT) and the European Union Chamber of Commerce in Toronto (EUCOCIT), held a roundtable event on February 2, 2010 to provide the business community with an update on the status of the negotiations. This is the third such event hosted by I.E.Canada member, Bennett, Jones LLP. With over 50 participants in attendance, the roundtable discussion highlighted the trade agreement’s potential impact on the Canadian business community and specific industry sectors, as well as the ways in which government officials and the Canadian business community can work together to reduce trade barriers and achieve consensus in order to attain the common goal of expanding and diversifying trade between the two trading regions. Steve Verheul, Chief Trade Negotiator for Canada-European Union, DFAIT, provided a briefing on the second round of negotiations, which was attended by a Canadian delegation of over 100 officials, including 40 provincial representatives. He noted that with these negotiations, Canada and the EU are aiming to create a modern standard for free trade agreements (FTAs). Not only will the CETA address regulatory cooperation, which is rarely seen in FTAs, it will also contain a new model for investment protection and a more effective dispute settlement mechanism. In addition, it will incorporate chapters on labour and the environment, rather than addressing these issues in separate side agreements. The most recent round of negotiations exceeded expectations. However, Mr. Verheul acknowledged that so far the negotiators have been addressing less sensitive issues; the difficult negotiations are yet to come. At the core of any free trade agreement is tariff elimination. The negotiators have already agreed that 90% of tariffs lines would become duty free immediately. However, the 10% that remain to be negotiated are highly sensitive and include products such as beef, pork, poultry, wheat, fish, some fruit and vegetables, automotive parts, textiles and apparel, and footwear. Other challenging areas include the following:
The third round of negotiations is scheduled for April 19-23, 2010 in Ottawa. Intercessional work has also been scheduled with the aim of completing a comprehensive draft of the agreement by late March in preparation for the next round. Bracketed text will be reduced to where the real issues are. Future rounds are planned for July 12-16, 2010 in Brussels and October 18-22, 2010 in Ottawa. Following the October round, the parties will take stock of progress before planning future rounds. The EU is not interested in long, drawn out negotiations. Jason Langrish, executive director of the Canada-Europe Roundtable for Business provided a business perspective on the second round of negotiations. Jason emphasized the importance of issues such as government procurement and intellectual property. In the area of market access he highlighted the benefits Canada could realize in the agricultural sector with products such as beef, pork and grains. He noted that the EU is particularly interested in reducing carbon foot-printing, while continuing European investment in the Canadian resource sector. Jason further stressed the importance for Canada of having recourse to an effective binding dispute resolution mechanism. The removal of internal provincial trade barriers within Canada is also acknowledged to be a continued trade barrier from the EU’s perspective. From the agricultural perspective, Myles Dew, Dairy Imports and Domestic Trade Manager, Ronald A. Chisholm Limited reiterated the impact this agreement will have on the meat and dairy sectors in terms of market access, product pricing and quota.Dr. Keith Mussar, Chair, Food Committee, I.E.Canada stressed the importance of addressing differences in regulatory and standards regimes in order to remove barriers to the free movement of goods. For example, Canada’s nutrient fortification requirements for flour and products containing flour under the Canadian Food and Drug Regulations are different from the mandatory requirements imposed in the U.K. While tariffs may be removed, the differences in these mandatory requirements will create a significant impediment to trade in the affected products. Another example is the new Canada Organic Products Regulations. These regulations incorporate by reference industry standards, which is a rather unique situation. Referencing industry standards can result in significant barriers for importers as the standards are predominately influenced by domestic stakeholders. If importers are not fairly represented during the negotiation of the agreed upon standards, then importers may face unplanned challenges. In highlighting these potential barriers to trade, Dr. Mussar urged the Canadian government to continue its work in developing regulatory cohesion with the EU. He also stressed the importance of building consensus amongst industry stakeholders and government officials in order to eliminate any impediments to the free movement of goods between Canada and the EU. It is clear that there is strong interest on both the Canadian and EU sides to reach an agreement. If successful, the CETA negotiations will result in the most comprehensive free trade agreement that Canada has ever signed. It was clear from Mr. Verheul’s remarks, however, that while the EU negotiators have the benefit of detailed input from the European business community, the Canadian negotiators are hampered by the lack of similar input from Canadian business. Given the fast pace of the negotiations, I.E.Canada is urging members to become engaged and to provide detailed input to the Canadian negotiators to assist them in ensuring that the CETA will benefit the interests of Canadian business. This input may be provided directly or through the association. On March 3, 2010, I.E.Canada along with other Ontario industry representatives are meeting with the Honourable Sandra Pupatello, Ontario Minister of Economic Development and Trade, and Maurice Bitran, Ontario Chief Negotiator to discuss business priorities and the impact of the free trade agreement on Ontario businesses. I.E.Canada would like to acknowledge Darrel Pearson and Milos Barutciski, partners at Bennett Jones LLP, and thank them for hosting and supporting these industry-government roundtable discussions on behalf of I.E.Canada. Given the growing interest in Canada’s trade policy and free trade negotiations, I.E.Canada is establishing a Trade Policy Committee to monitor Canada’s trade negotiations and to provide a forum for industry to have input to the Canadian government through I.E.Canada. If you are interested in joining the Trade Policy Committee, or receiving information about any of our other committees and their upcoming meetings, please contact Amesika Baëta, Committee Director, at abaeta@iecanada.com. This article was written by I.E.Canada’s Carol Osmond, vice president, policy and Amesika Baëta, committee director. |
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I.E.CANADA NEWS
Disclaimer - I.E.Now is designed to provide members with the most up-to-date trade information from a variety of sources. The information we feature does not necessarily reflect the association's opinion on a given international trade issue. While every effort has been made to ensure the accuracy of the information notedin the daily e-mail, government policies are constantly evolving. The Canadian Association of Importers and Exporters Inc. cannot assume any responsibility for actions taken solely or principally on the basis of the information provided.
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