CETA trade deal still shrouded in tight secrecy

February 12, 2014

After nearly five years of negotiations, the details of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) remain shrouded in secrecy.  In October, Prime Minister Harper, eager to deflect attention from the Senate scandal, went to Brussels to announce an “agreement-in-principle.” Since then, federal ministers have fanned out across the country to proclaim the alleged benefits of the deal.  Yet, months later, the text is still a closely guarded secret. 

Last week in Ottawa the new EU ambassador to Canada, Marie-Anne Coninsx, confirmed that “technical negotiations” on the CETA are still underway and that the text may not be publicly released for another six months, or longer. 

Nor has the PEI provincial government publicly released its list of “reservations” - the exceptions that might shield key policies, such as PEI’s non-resident land ownership policies, from challenge under the CETA.

By the time the federal and provincial governments provide the details, it could be too late for citizens to have a proper say or to correct mistakes.

There is no question that international trade is vital to the PEI economy.   But it is not “anti-trade” to question whether the proposed deal will benefit the majority of Prince Edward Islanders.

Trade between Europe and Canada is already very open.  EU tariffs on Canadian products average just 2.2%.  In any case, tariffs and trade are only a small part of the treaty.  

The CETA is a constitutional-style document that will hike provincial drug costs, erode supply management in the dairy industry and undermine the authority of provincial and local governments to boost local economic development.  In addition, it would increase the province’s vulnerability to corporate lawsuits against environmental protection and other public interest regulations. 

Canada has caved in to EU demands to extend monopoly patent protection for brand-name pharmaceuticals by up to two years.  This step will delay the introduction of cheaper, equally effective generic medicines, costing Canadians an estimated $800 million annually.  This CETA provision is not about creating new wealth through trade; it is simply about transferring millions of dollars from consumers and taxpayers to already extremely profitable multinational drug companies.   The increased costs to Islanders would be more than $3 million a year.

Corporate agriculture could also profit from the CETA.  The EU has agreed to eliminate its 15% tariff on frozen French fries, making it cheaper to ship to European markets (although as the recent layoffs at Cavendish Farms attest, there is already a glut of processing capacity worldwide.)

But, in return, Canada agreed to nearly double the quota of European cheese entering our country, seriously eroding the supply-managed system, which the federal and PEI governments had pledged to defend.  The influx of subsidized European cheese will harm local dairy farmers, cheese-makers and rural communities. 

The CETA will also make it harder to support small-scale, local, organic alternatives.   Encouraging public hospitals, nursing homes or other public institutions to give priority to locally grown produce in their food purchases will be banned by CETA.

Similarly, as a condition for dropping its high tariffs on fish (averaging 11%) the EU has insisted that Canada eliminate all restrictions on the export of unprocessed fish.  PEI’s inshore fishermen should also be aware that the CETA’s investment rules are more intrusive than those in previous treaties.   Fleet separation and owner-operator policies are considered illegal investment restrictions that must be exempted.  While safe for now, these vital policies will be targets for elimination in future trade negotiations.

In the past, PEI has shown good sense by linking renewable energy development to creating local benefits.   Unless the province takes ironclad reservations, such policies will be prohibited under the CETA.  The agreement protects foreign investors from obligations to provide benefits to the community whose resources they are exploiting. 

The CETA also includes an investor-state dispute mechanism, which gives unaccountable tribunals the power to order governments to compensate foreign investors allegedly harmed by public policies or regulations.  Policies aimed at protecting the Island’s water supply, preserving coastal or environmentally sensitive areas, and moratoriums on fracking or offshore oil exploration could all be targets for investor challenges under this appallingly anti-democratic process. 

Yes, trade is essential.  But governmental rights to curb corporate power and intervene to ensure that citizens and the local economy benefit from trade are equally critical.  

PEI’s best leaders have always stood up against outside trends that threatened to erode Islanders’ control over their own destiny.  Governments led by Angus MacLean, who championed rural renaissance, and Joe Ghiz, who opposed the Canada US FTA and NAFTA, instinctively recognized the need for action. 

Our current provincial leaders need to find the backbone to ensure that self-government and the ability of communities and working people to gain a greater share of the economic pie are not sacrificed on the altar of a reckless free trade agenda.

Scott Sinclair is the director of CCPA's Trade and Investment Research Project (TIRP).

This op-ed was first published in The Charlottetown Guardian.