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Canada-EU free trade talks will be long and bumpy

Troy Media | February 2, 2010

Canada-EU free trade talks will be long and bumpy

By Einar Du Rietz
Brussels Bureau Chief

BRUSSELS, Feb. 2, 2010/ Troy Media/ — While negotiations towards a solid free-trade agreement between Canada and the European Union are underway, it looks like it’s going to be a long process.

The goals in pursuit of a “Comprehensive Economic and Trade Agreement (CETA),” which would eliminate virtually all barriers for both goods and people between Canada and the EU, are lofty. But while the aims for both sides are clear, the barriers to achieving them are less so.

The negotiations began in the spring on 2009, when the European Council, which is comprised of the heads of state or government of the Union’s member states, as well as its President and the President of the Commission, gave its approval to move ahead.

A new wrinkle

But a new wrinkle was added to the negotiations with the final signing of the Lisbon treaty in 2009. Under the treaty, it is now the European Parliament which must approve the final agreement.

The risk is that vested interests, especially during the customary bargaining process in parliament which occurs on all issues, will scuttle any hopes for an agreement.

“This sort of negotiations always involves frictions,” Jens Eriksson, Senior Advisor to the Swedish minister of trade Ewa Bjorling, said. “We learned that in connection to the final talks on the free-trade treaty with South Korea recently. Then, the major concern was the fear of increased competition in the auto industry. The current process has not come that far yet and no major areas of conflict have surfaced so far. The reports we receive indicate that the process continues and that the negotiation climate is very positive.”

But, he added, “this is not the same as to say that no obstacles will occur. Our experience tells us otherwise, but so far so good.”

According to Eriksson, it has been Canada which has been pushing the process. “The EU is Canada’s second largest trade partner,” he said, “and extremely important to the Canadian economy. I hope, and am convinced, that (the Canadians) see the benefits of more open trade. The ambitions to succeed have been clear and strong on all political sides. We have all seen the potential benefits. The EU/Canada summit in May should provide an opportunity to see how far we have come.”

The most common barriers to an agreement revolve around seal products and hormone-treated meat. There is a risk that an otherwise benevolent negotiation process might be vulnerable to these alone. However, it is too early to say, though there has been some progress, Eriksson added:

“One of the oldest trade conflicts between us and both Canada and the US, based on the EU ban on import of hormone-treated meat, was finally settled during the (recent) Swedish presidency (of the EU). Concerning the EU ban on import and trade of seal products, we – from the Swedish side – have warned about potential conflicts within the World Trade Organization. This has also led both Norway, which is not a EU member state, and Canada to request consultations. So far, as far as I know, there still does not exist a formal complaint against the EU.”

But regardless of the obstacles, the EU remains enthusiastic about a free-trade agreement with Canada and Eriksson sees no limit to the potential liberalizations in the end.

The EU has “clearly stated that we are prepared to discuss all subjects of interest to both of us,” he said. “The prime issue is economic cooperation, for example movement of people, labor market and related issues which might be affected by discussions about the service sector and public procurement.”

There is no dispute about the potential benefits of an agreement for both sides. But while the prospects of achieving an agreement are good, and given the workings of international politics, it’s likely to be a long and sometimes bumpy road.

 source: Troy Media