Toronto’s last-ditch attempt to soften Canada-EU free trade deal
The Star, Toronto
Toronto’s last-ditch attempt to soften Canada-EU free trade deal
7 March 2012
By Thomas Walkom
Toronto city council’s decision this week to seek an exemption from any Canada-Europe free trade agreement didn’t get much attention.
That’s understandable. Councillors have a history of taking stands in areas over which they have no control, from nuclear disarmament to the Vietnam War.
But Tuesday’s decision was different in that the body being appealed to — the provincial government — does have considerable influence.
At issue is the proposed Canada-European Union Comprehensive Economic and Trade Agreement, a pet project of Prime Minister Stephen Harper.
Like most modern trade agreements, this proposal is less about freeing trade and more about limiting the ability of governments to regulate global business.
But unlike Canada’s original free trade pacts with the United States, the Canada-European deal requires immediate buy-in from the provinces.
The 27 countries that make up the European Union will play ball only if the 10 provinces that make up Canada agree to do so as well.
And so, in addition to the secretive discussions between federal officials and the EU, another layer of behind-closed-doors negotiations is going on.
Those are the negotiations over how much authority the provinces, including Ontario, are willing to give up.
And one of the key areas here is government procurement.
Governments often insist on local benefits when they award contracts. Ontario, for example, requires that a portion of any public transit it funds be manufactured in Ontario. Municipal governments routinely demand similar benefits.
Such practices are good for the local economy. But they almost invariably fall afoul of strict free trade rules.
If, say, a German engineering firm gets a contract to rebuild Toronto sewers it would probably want to use the cheapest suppliers, local or not.
Right now, Toronto council can insist on local content as a condition of awarding any contract. Under a comprehensive Canada-EU free trade deal it could not.
Which is why Toronto passed Tuesday’s motion.
According to the Council of Canadians, which has been monitoring progress of the Canada-EU deal (and which opposes it), about 25 Canadian municipalities have now asked to be exempted from the proposed pact.
What does this mean?
First, this concerted action puts more light on the proposed agreement. When Canada started down the free trade path almost 30 years ago, every deal was controversial.
Now, almost none is.
The Canada-EU deal in particular receives scant attention even though, as economist Don Drummond noted in his recent report to the Ontario government, it could have profound effects on health spending.
That’s because the EU wants more patent protection for European brand-name pharmaceutical manufacturers, a move that would make Ontario’s publicly funded drug programs even more expensive.
Second, Toronto council’s decision focuses pressure, quite properly, on the Ontario government.
Usually, provinces get a pass when free trade is under discussion. This time, Ontario Premier Dalton McGuinty deserves to have his feet put to the fire.
Stuart Trew of the Council of Canadians says that in the talks so far, Ontario has been fiercely protective of its hydro-electric sector. We can assume that McGuinty is also anxious to protect his government’s ability to subsidize so-called green manufacturing in Ontario, since that has been one of his signature policies.
Will Ontario give away local procurement in return? As the Star’s Linda Diebel reported recently, McGuinty seems to be veering that way.
For anyone who wants to pressure Queen’s Park on this, the crunch time is fast approaching. That’s what Toronto council has belatedly come to understand.
Thomas Walkom’s column appears Wednesday, Thursday and Saturday.
