A Canada-EU trade deal? ‘Hmm …’

Paul Wells explains why CETA seems so unlikely

One of the longest-lasting stories in Stephen Harper’s tenure as Prime Minister will end this month. Unless it doesn’t end. But everyone’s going to give it a college try.

While the current issue of Maclean’s is on newsstands, Ed Fast, Canada’s trade minister, will travel to Brussels to meet his approximate counterpart, European Trade Commissioner Karel De Gucht. The subject is an ambitious trade deal Canada is trying to reach with the European Union. Bureaucrats and negotiators from both sides have been meeting regularly for 3½ years. They left all the hard decisions to the end. This is the end. Fast’s meeting with de Gucht will be the first negotiation among politicians instead of civil servants. It comes six weeks before the New Year, the date Stephen Harper named during the 2011 campaign as the deadline for a deal.

Everybody connected to the negotiations assures me there will be a deal. Every public sign I see makes me think there won’t.

At the end of October, De Gucht, a former Belgian foreign minister, sat down for a webcast interview with an EU journalist about the negotiations. His body language was comical. “I hope that we can finish these negotiations by the end of the year,” he said. “That’s the day after tomorrow, hmm?” Translation: that deadline is really freaking close.

So, he said, Fast would come to Brussels. “But we should have no illusions. There are still a number of difficult issues to tackle. So I’m not promising anything. But we will make a major effort to close the deal before the end of the year. That’s what we are going to do. But there are a number of issues I believe that you can only resolve at the political level. That’s why . . . we will have a ministerial [meeting] to, yeah, to close the deal, I mean to sort it out and do the necessary political arbitration.”

Pro tip: if an automobile salesman describes his product to you in similar halting terms, don’t buy the car.

Two weeks later, De Gucht was sounding far more chipper. “I expect to conclude a comprehensive agreement with Canada very soon,” he told a business audience in Mexico. “Even more crucially, it is possible that we will start talks for a deep free trade agreement with the United States, if our leaders agree on this in the new year.”

But now it was Harper’s turn to sound less than bullish. “There’s a lot of roadblocks out there in all these relationships, China, India, the negotiations with the European Union, the Americas strategy,” he told the Toronto Star. “Frankly, because of all the impediments, my judgment is that we have to go hard on all fronts and see what actually progresses.”

Why does it matter? Because the so-called Comprehensive Economic and Trade Agreement (CETA) with Europe is the biggest and oldest trade file on the government docket. Jean Charest started pushing European contacts to take the idea seriously during his first term as Quebec premier, in 2006. Harper came on board in early 2007. Negotiations began in 2009, after a preliminary study suggested an agreement could be worth $12 billion a year to Canada. Back then, Stockwell Day was the trade minister and he said he’d like to see negotiations conclude by the end of 2010. They slipped, and slipped again, and slipped some more, and now it’s two years later.

Why is it so hard? A Canada-EU CETA would be much more ambitious in opening markets in services, investment and government procurement than the Canada-U.S. free trade agreement. A broad range of domestic interests on both sides would rather keep those markets closed. And the opponents of CETA have been far more effective at mobilizing opposition than its proponents have been at mobilizing support.

The nationalist Council of Canadians lists more than 70 municipalities and municipal organizations that have debated local resolutions demanding that they be exempted from CETA’s procurement provisions. They want the right to prefer local contractors instead of letting European firms bid. Then there are CETA negotiators’ proposals to extend patent protection on Canadian pharmaceuticals to match European protections, which would tend to drive up the cost of prescription medication. Finally, farmers whose products are supply-managed don’t want to open the Canadian market to an avalanche of European dairy and other products.

I’ve talked to a succession of Harper trade ministers who didn’t buy any of those arguments. Harper devoted several days to pitching CETA on the campaign trail last year because he sees his support for trade as a key contrast with the NDP and other opposition parties.

But Harper has tried to play this file differently from the way Brian Mulroney played the Canada-U.S. free trade wars. He thought he could low-bridge CETA, keep the whole process low-key, avoid ratcheting up the tension. Now the deal’s opponents have outflanked him on every side. He can still storm ahead, reach a deal and pass it with nobody else’s approval.

But Harper has had a rough several weeks over far more obscure trade files than CETA. Something, or a bunch of somethings, has made this negotiation drag on twice as long as the government first hoped. All those somethings remain. It’ll be an interesting end to a long year for this Prime Minister.

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