EU-CANADA TRADE DEAL NOT TO BE PUT IN PLACE BEFORE 2016

Canada and the European Union are still negotiating key aspects of the free trade pact with implementation possibly as much as two years away. Finalizing the deal, fixing all the legal language, translating the agreement and obtaining approval in Europe and Canada would take until the spring of 2015. But negotiators have yet to resolve a handful of thorny trade issues. The EU demands for stronger intellectual property protection on pharmaceuticals; market access into Europe for Canadian automobile and parts manufacturers; government procurement on infrastructure projects; and financial services and investment protection (including when investors can sue governments)  and the EU now doesn’t expect the pact to be put in place until late 2015 or early 2016.

While all indications are the pact — officially called the Comprehensive Economic and Trade Agreement (CETA) — will in time be finished and ratified by parliamentarians in Canada and Europe, the chance is that the deal will run into problems increases as time goes on.

It is expected that the new MEPs will approve CETA but 28 member states of the EU must also ratify the pact. The ratification of a CETA with Canada will depend on the agreement's scope. If the agreement deals solely with matters over which the EU has exclusive jurisdiction, ratification will follow the normal legislative procedure, under which a bill must be passed jointly by the European Parliament and the Council of the EU, which is comprised of ministers from the 28 member states.  In the event of a “mixed agreement” (one with some provisions falling under EU jurisdiction and some under member state jurisdiction), in addition to the normal legislative procedure at the European level described above, ratification of the agreement by each of the 28 EU member states will be required. The EU member states would thus have a greater influence on the outcome of the negotiations in the second scenario

Negotiators are still working on a small number of important outstanding issues. On the table are proposed rules related to import quotas for beef and pork, provision of services by business, investment rules and guidelines for determining, for instance, whether Canadian-exported cars with a mix of Canadian and United States parts are eligible for tariff reductions under CETA.

The CETA talks could yet be influenced by the investor-state worries raised by the EU-U.S. negotiations.

The CETA would have the potential to boost bilateral trade by $38 billion, an increase of 20%.