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Agreement comes down to the wire

Embassy, May 31st, 2006


By Sarah McGregor

Agreement Comes Down To The Wire

The tough parts always come last in trade agreements, and CA4 is no exception as affected parties ask for public access to the negotiations.

The Conservative government is facing demands from within the hemisphere to disclose a draft free trade agreement with four Central American nations currently in the final stages of deliberation behind closed doors.

Some 150 solidarity groups from Latin America and Canada have signed an open letter urging Ottawa to lift the veil of secrecy on a pact for Guatemala, Nicaragua, El Salvador and Honduras to open their economies to Canada. The letter is to be delivered to the government on June 12, the day of a public hearing into the so-called CA4, or Canada-Central America Four Free Trade Agreement.

The missive also asks for an informed public and political debate on the commerce pact, which aims to knock down tariff barriers and encourage investment.

Prime Minister Stephen Harper has released no details about his government’s proposed new policy to pass international treaties through Parliament, including whether politicians will be able to alter rules or defeat them. "This is one of several bilateral trade agreements that is being negotiated with no transparency, public, or parliamentary debate," says Nadja Drost, Program Officer, Americas Policy Group of the Canadian Council for International Cooperation in Ottawa, one of the groups opposing the mysterious negotiation process of the CA4.

Conservative MP Ted Menzies says study of the agreement in the House Committee could satisfy the prime minister’s promise of political input and produce a motion of cross-party support if the assessment is positive. "I think this would be the opportunity [for political opinion]," says Mr. Menzies. "The House is really busy... but the committee has the opportunity to ask questions to the industry experts."

In Canada, the tradition has been for skilled bureaucrats from the federal and provincial governments to lead rounds of negotiations on the advice of Cabinet Ministers whose departments have something at stake. At no point along the way must free trade agreements pass the legislature for ratification. The prime minister holds unilateral power to seal the deal. In recent years, limited consultation from elected representatives and ordinary Canadians was sought ahead of the ratification of bilateral trade agreements with Israel, Costa Rica and Chile. Public opinion is often harnessed through such informal channels as roundtables and email submissions. By comparison, the deep integration of Canada, the United States and Mexico through the North American Free Trade Agreement was the subject of spirited debate that split Canadians.

The signal from government officials in Ottawa is that southern dealmakers have insisted the contents of the agreement remain secret to sustain bargaining power.

CA4’s Recent Developments

Negotiators from CA4 nations were in Antigua, Guatemala this month to re-energize talks that have been stalled since 2004 when the United States inked its own deal with Central America, including the Dominican Republic and Costa Rica. CAFTA-DR, as its known, narrowly passed by two votes in the House of Representatives in 2005 amid fears of job loss and damage to the U.S.’s domestic textile and sugar industries.

Dealmakers of the CA4 including Canada are set to convene again in July, likely in Central America. The latest meetings are informal and meant to prepare for upcoming sessions that could become the real pressure cookers. As is commonly the case in trade negotiations, the toughest issues have been left to the last, according to Brooke Grantham, a spokesman for International Trade Canada. "At this advanced stage of negotiation it’s not unusual to be addressing some of the more sensitive issues on both sides," he says.

Market access for agriculture products and duty- and quota-free status for textiles and apparels are among the unresolved matters.

One of the few Canadians conversant on the legal complexities of international trade treaties is Don Fleming, an author and law professor at the University of New Brunswick.

He says published working papers that outline the core elements of the talks are sufficient for the public to decide whether the agreement is a good or bad thing. "It seems to me counterproductive to have someone looking over their shoulder as they discuss all of the details" he says.

He warns that the dense substance of international trade treaties would confound politicians and it should remain the role of technical experts to wade through the minutiae. The NAFTA rules surrounding the trade of goods and services runs 3,000 pages and technical directions for the World Trade Organization, that sit on top of most global trade activities, are almost four times the length, he emphasizes. "You just can’t take that kind of detail to an elected body and expect them to understand it," says Mr. Flemming.

Parliament has a role in passing legislation to implement the final trade document if national laws must change to conform to the global pact, he says.

Mr. Fleming recommends an expansion of the negotiating delegation to include the full range of stakeholders. "Your representation should come from the diversity of your delegation," he says.

How Much Trade?

Trade almost tripled between Canada and the CA4 countries between 1995 and 2003-04, to $768 million from $291 million; less than one per cent of Canada’s total trade. The relationship is so tiny that the value of an entire year’s worth of business between the CA4 and Canada is the equivalent to two-thirds of daily cross-border trade with the United States. The bulk of Canadian exports to Central America consist of goods: cereals and malt, paper, fertilizers, fats and oils, plastics, machinery, dairy products and vegetables.

A free trade agreement isn’t expected to make a major impression on trade, says the government.

Mark Eyking, a Liberal MP and former parliamentary secretary for emerging markets, says the economic pact could serve to promote political freedom in a part of the world that is increasingly at odds with the United States. "It keeps peace," he says, of strong trade ties. "It’s small but a nice piece of business [for Canada]." Mr. Eyking says creating bi-partisan support and incorporating peoples’ views into trade treaties should have greater importance. "Sometimes trade is put in a box and not given enough importance on the Hill. Trade is linked to stability. You take Central America, it’s touchy there," he says.

The CA4 Under Wraps

CA4 opposition centres on a labour side agreement that some fear will not protect the rights of workers in the southern countries that have weak employment laws. An environmental examination is completed, but concerns run high as Canada’s extraction industry is a major force in Central America. Another key concern is a clause that will allow corporations to sue nations for creating laws that negatively effective their bottom-line.

These issues and more will come to a head when the Commons International Trade committee hears testimony on the CA4 on Parliament Hill, June 12.

Ms. Drost says human rights advocates are wary of promises by the Conservative government to grant Parliament new power to vote on international treaties, saying politicians must first be made knowledgeable on the pros and cons of such an accord to make an informed choice. Precisely what is under discussion must be made fully known otherwise politicians will have no idea what they’re getting into, says Ms. Drost.

Some of the developing nations involved are healing from years of civil strife and struggling to grab a hold of democracy. Among the persistent problems across the region are massive income inequality, grinding poverty and recurrent natural disasters. "I think members of Parliament need to know about this," says Ms. Drost. "It has to get into the public discourse."

 source: Embassy Magazine