What Do EU-Canada Trade Negotiations Mean for a EU-U.S. Trade Agreement?
September 30, 2013
The Johns Hopkins University School of Advanced International Studies (SAIS)
Rome Building, Room 806
Karel Lanoo, Chief Executive Officer, Center for European Policy Studies, Brussels
Patrick Leblond, Associate Professor, Graduate School of Public and International Affairs, Ottawa University
Dan Hamilton, Executive Director, Center for Transatlantic Relations
Since 2009, the EU and Canada have been negotiating Comprehensive Economic and Trade Agreement (CETA). The original intention to conclude a final agreement by 2011 has not been met, and the agreement remains unsigned. Now the EU and the U.S. started their negotiations of a comprehensive Transatlantic Trade and Investment Partnership (TTIP) in 2013. The fact that negotiations on CETA are still ongoing makes it clear that the process of negotiations between similarly developed trade partners is complex and that seemingly small obstacles can stall the process for years. This may not bode well for the ambitious timeline of finishing TTIP negotiations by the end of 2014. The panelists discussed some of the unresolved and prospective challenges facing Canadian, American, and European trade negotiators as well as avenues for successful completion of the respective agreements.
“Squaring the Provincial Circle:” Political Challenges and Stalled EU-Canada Trade Negotiations
According to Professor Leblond, the EU and Canada approached the CETA negotiations with specific objectives. Canada desired to obtain market access to increase exports of beef and pork as well as open public procurement at the sub-state level. Meanwhile, the EU wanted greater access to Canada’s dairy market, greater intellectual property protections, also sought access to municipal and provincial procurement, and hoped that CETA could be a “pathway” to eventual negotiations with the U.S. Professor Leblond noted that a CETA agreement is “very close,” yet the negotiators have gone as far as possible, and now politicians must complete the deal.
Professor Leblond then examined the provincial political considerations that may impact decision-making within the Ottawa government. Beyond traditional regional concerns (Alberta – beef/pork; Eastern Ontario and Quebec – dairy farmers; and demands for less intellectual property protection from Toronto and more from Montreal’s pharmaceutical industry), provincial governments have jurisdiction over aspects of CETA. Specifically, provincial governments can discriminate against European firms on issues of public procurement. Meanwhile, there is no effective dispute resolution mechanism that can hold provincial governments accountable. Instead, the federal government is forced to incur any cost. Finally, there is no mechanism for the Prime Minister to speak with provincial premiers, and little desire on Ottawa’s part to establish one.
These issues have stalled Canada-EU negotiations and undermined Canada’s global position. Canada is becoming viewed as a weak international partner and it risks “missing the boat” as the U.S. and EU negotiate TTIP because Ottawa will never get a better deal than what was had under CETA.
EU-U.S. TTIP Negotiations: Economics and Geopolitics
Center for European Policy Studies CEO Karel Lanoo and CTR Executive Director Dan Hamilton explored U.S. and European perspectives on the ongoing TTIP negotiations and analyzed possible challenges to completing the agreement. Mr. Lanoo noted that automotives and chemicals sectors will see the largest impact from a tariff reduction due to TTIP, but the transatlantic economy is also a services economy so great impact can be had from reducing non-tariff barriers and greater regulatory harmonization. Mr. Lanoo noted that a full deal, not a limited free trade agreement, would offer the most benefit. While other commentators have expressed concerned about a “race-to-the-bottom” in regulatory standards, Mr. Lanoo was not concerned and supported the inclusion of financial services within the negotiations. Its inclusion would put pressure on parallel tracks. Mr. Lanoo cited agriculture, data privacy, and intellectual property as specific sectors that could be problematic for negotiators.
Dr. Hamilton reiterated Mr. Lanoo’s assertion that regulatory coherence would provide greater benefits, and emphasized that investment, not trade, drives the transatlantic economy. Since TTIP is more than a traditional free trade agreement, Dr. Hamilton suggested that the focus regarding TTIP should be on the new mechanisms that facilitate transatlantic cooperation as well as the geopolitical implications of such a deal. Similar to Professor Leblond, Dr. Hamilton suggested that U.S. states may challenge TTIP in areas such as public procurement.