Ei-iE

Canada-Europe free trade talks under scrutiny

published 28 January 2010 updated 28 January 2010

The second round of negotiations for a Canada-Europe Comprehensive Economic and Trade Agreement (CETA) took place in Brussels in January amid growing trade union and civil society concerns about the scope and impact of the treaty.

Education International held meetings with European Commission and Canadian officials in Brussels in January in an effort to find out more about the deal and its potential implications for educators on the two sides of the Atlantic.

Both EC and Canadian negotiators said education services had not been directly discussed by either side to date, but other elements of the deal, such as intellectual property, government procurement, labour mobility and domestic regulation could impact the sector.

Canadian officials admitted that EU demands on intellectual property were controversial within the education community, and dismissed EU claims that Canada is a “rogue state” when it comes to copyright protection.

According to a leaked proposal, the EU says there are “severe deficiencies” in Canada’s intellectual property rights regime and is asking Canada to extend its copyright protection by 20 years more than required by international law, increase its enforcement provisions and penalties, and make it illegal to circumvent locks placed on digital material.

Michael Geist, professor of law at the University of Ottawa, said in a blog posting that “there is little doubt there will be enormous pressure on Canadian negotiators to cave on the IP provision in return for gains in other areas.”

“CETA may not have attracted much attention to date, but its long-term implications could ultimately exceed the first Canada-U.S. FTA,” he added.

The EU has adopted an ambitious stance in the negotiations following the failure of previous free trade talks with Canada.

EC negotiators said they will need significant commitments from Canada in order to justify signing a deal that could become a template for separate negotiations also underway or planned with India, Singapore and Korea.

Government procurement, including purchases of goods and services by schools and universities above a certain amount, is a major priority, officials said, to ensure that European companies can bid on these contracts.

Surprisingly, Canadian officials indicated they have not identified their key demands yet even though a draft text of the agreement has been prepared.

Nevertheless, there has been some speculation and worry in Europe that Canada will demand controversial investor-to-state dispute rights which gives individual companies the ability, independent of their government, to launch legal action against a party for alleged violation of the agreement.

Such investor rights are common in many bilateral investment treaties and are a key feature of the North American Free Trade Agreement (NAFTA) where a number of cases launched by companies against governments have generated ongoing controversies about the ability of investors to usurp democratic decision-making.

Canadian officials were coy about whether they would put investor rights on the negotiating table, but said it was of interest.

“Investor-to-state is our preferred approach in trade,” one Canadian official admitted. “However, it’s still early days and we’ll have to see what interest there is on the other side.”

For their part, EC officials said that while investor-to-state dispute rights “can be dangerous”, the “Canadian model looks interesting.”

EC officials also noted that CETA is the first agreement being negotiated under new Treaty of Lisbon rules which came into force in December 2009. The treaty grants the EU exclusive competence, with a qualified majority voting, in all matters related to external trade, including services, intellectual property rights, and investment.

The result is that decisions related to the trade in social services, health, education and audiovisual services no longer automatically require unanimity, but only a qualified majority voting. However, the Treaty does provide member states the right to invoke unanimity in decision-making when agreements “risk prejudicing the Union’s linguistic and cultural diversity” or ‘seriously disturbing the national organization of such services and prejudicing the responsibility of Member States to deliver them.”

At the same time, the European Parliament will have a greater involvement in setting trade policy and in ratifying trade agreements, meaning that EI affiliates in Europe will have an important role to play in lobbing Members of the European Parliament.

The third round of CETA negotiations are scheduled for April, with further rounds expected to be held in July and early autumn after which both sides will assess the prospect for concluding the talks.