Canada-European Union Comprehensive Economic and Trade Agreement

August 20, 2011


I have received correspondence in the past from residents regarding the proposed Canada-European Union Comprehensive Economic and Trade Agreement (CETA).

This is information that was recently circulated by the Association of Municipalities of Ontario to all municipalities:

The Canada-European Union Comprehensive Economic and Trade Agreement’s (CETA) implications for municipal governments is a topic that more and more municipalities in Ontario are becoming interested in as citizens and local groups make deputations to councils across the Province.

The European Union (EU) market represents the largest trading bloc in the world with annual GDP of almost $19 trillion in 2009 meaning that a successful agreement with the EU could have important implications to economic development in Canada.

AMO understands that while the Canadian government and the European Union have been in discussions regarding a trade and economic deal since 2009, only recently have these discussions yielded an exchange of government procurement offers (i.e. Canadian access to EU and EU access to Canada, provinces, territories). AMO understands that the negotiating agenda for CETA also includes a number of other areas that are being discussed.

These include:

  •  Market Access (tariffs on goods);
  • regulatory cooperation;
  • intellectual property; 
  • temporary entry of business persons;
  • competition policy and other related matters;
  • labour; and
  • environment.

AMO is guided by the multiple interests of municipal governments and local decision making in all matters of policy and administration – interests that consider local autonomy, municipal property taxpayer value and the broader economic well-being of communities and Ontario among the myriad of other interests – so that municipalities are safeguarded in any initiative.

As the CETA negotiations progress, AMO anticipates that we may have an opportunity with the Province and within the confidentiality of any national process between the federal government, provinces and territories to better understand what the potential impacts may be for municipalities before a final agreement is reached.

To best assess CETA’s impact on municipalities, AMO has endorsed the guiding principles that the Federation of Canadian Municipalities (FCM) is using in its discussions with federal officials. These principles (below) in general require that any deal offer significant opportunities for economic development for our local companies for any limitations that may be accepted. We have shared these principles with the Ontario government to assist them in understanding our municipal perspective.

They are:

  • Reasonable procurement thresholds: Inappropriately high or broad procurement thresholds may force municipalities to tender projects when tendering is neither practical nor financially justified.
  • Streamlined administration: Ensuring that municipal procurement policies are free-trade compliant will likely create new costs and may require specialized expertise. The administrative design of these rules must be as streamlined as possible and developed in close cooperation with municipal procurement practitioners.
  • Progressive enforcement: Enforcing provisions of any deal should be progressive, starting with verbal or public warnings before moving to financial penalties, and should recognize and not penalize inadvertent non-compliance, particularly in cases where municipalities do not have the expertise to appropriately apply the rules.
  • Canadian content for strategic industries or sensitive projects: A trade deal must recognize strategic and public interest considerations before barring all preferential treatment based on country of origin. There may be industries of strategic significance to a particular region, such as transit, or projects where considerations of quality, public benefit, environmental protection or business ethics means that a local government may wish to implement minimum Canadian-content levels. This should be allowed, within reason. 
  • Dispute resolution: A dispute-resolution process, like the one in NAFTA, may require a careful review of the municipal role in that process so they can appropriately defend their policies and by-laws as an order of government. • Consultation and communications: Consultation and communications during negotiations are required to ensure any resulting agreement responds to municipal concerns. 
  • Reciprocity: Canada´s negotiating position must support reciprocity in Canadian and foreign municipal procurement practices.

It is anticipated that as the negotiations mature between the parties, greater engagement of municipalities across Canada will be sought. AMO will continue to work provincially and with FCM on this matter.

AMO also provided several resources:

  •  FCM’s web page on Free Trade Agreements and Position on Municipalities and Free Trade, including the federal Minister International Trade’s assurances to FCM that a final deal should adhere to the principles.
  • FCM’s Reality Check: The Comprehensive Economic and Trade Agreement (CETA) Between Canada and the European.
  • Foreign Affairs and International Trade Canada’s web page on Canada-European Union: Comprehensive Economic and Trade Agreement (CETA) Negotiations. 
  • July 15th, 2011 News Release on Canada-EU Free Trade Talks by Minister of International Trade, Ed Fast.
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About Karen Farbridge

An unwavering change maker seeking a just, democratic and sustainable world.

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