Canada and Europe in 2014

By | December 30, 2013

This past year saw dramatic developments for Canada on the trade front, by far the most prominent being the conclusion of negotiations with the European Union on a Comprehensive Economic and Trade Agreement (CETA).

Lots of fanfare last October in Brussels as the PM and EU President Barroso announced this milestone deal.

This was followed by intense rounds of PR by the Harper government, with cabinet ministers criss-crossing the country to tout the potential gains for Canada. Clearly, the CETA is vast in scope, much larger and intrusive (if that’s the right word) than the North American Free Trade Agreement.

What is likely to happen in 2014?

But even though the CETA’s general principles and an outline of its terms were announced, we still don’t have the actual text. Lawyers and other officials are still haggling over the legal wording. So a lot of the media discussion has been a bit on the theoretical side.

The public relations flurry mounted by the PMO masks the fact that we don’t have the details, wherein devils lurk.

We won’t get those details for several months. When we do, it’s going to unleash a lot of polemics about the pros and cons of the deal. The usual opponents, largely in the ranks of unionized labour, are gathering steam. There will be tugging for the hearts and minds of Canadians. However, even though Canadians appear largely supportive of CETA, this battle will clearly be something to watch in 2014.

Implementing the Deal

Another thing to watch is how the CETA will actually be implemented. There hasn’t been much discussion about this aspect but it’s an important and potentially vexing issue. That’s because both Canada and the EU have to bring the agreement into legal force throughout their respective territories. It’s one thing to sign a trade deal. Getting it into legally-binding effect is quite another operation.

In Brussels, the EU Commission has overriding authority to implement international trade agreements through regulation. Politically, however, the EU will have to ensure general consensus in all twenty-eight capitals. And the text will have to be translated into fifteen of the EU’s official languages. Will all of this happen in 2014.

In Canada, the Harper government will table the final text in the House of Commons and, while not constitutionally required, will ask for Parliamentary approval. A federal implementing bill will also be needed – for example, to reduce duties on European goods. The package will be referred to the House Foreign Affairs and Trade Committee, something that will produce interesting fireworks in 2014, particularly from the NDP and Ms. May of the Greens.

What will the provinces and territories have to do? Much of the CETA concerns their areas of jurisdiction. So one question is whether actual provincial or territorial legislation will be needed, something that would be a minefield. To avoid that – and because it is not legally necessary – provincial implementing legislation is not being sought.

Rather, the Feds will still seek provincial approval as a political matter. This will likely be by some sort of resolution or endorsement by all legislatures. The lay of the land in all ten provinces and three territories is that this will be forthcoming. All have been at the CETA negotiating table and all are seemingly on-side.

In the case of Ontario and Quebec, where there could be elections in 2014, the opposition parties have endorsed the deal. So the betting is that there won’t be the drama encountered with the Meech Lake accord in 1989.

A point of note here. When Canada and the EU ratify the CETA, possibly in the coming year, they will then be legally committed as treaty partners. In other words, Canada as a whole will be bound by the CETA. Should one or another of the provinces or territories fail to comply Canada’s obligations (or if one of the EU member states does), the other side will be able to invoke binding arbitration to enforce the deal.

The practical effect of this is that the provinces and territories will have to meet the terms of CETA or face enforcement litigation by the European Union. Of course, Canada will have the same rights if any of the EU member countries fail to adhere to the agreement.

So in as nutshell, while the flurry of attention has subsided recently, the CETA story should produce some interesting and potentially dramatic episodes in 2014 as we move on to the next chapter in this ground-breaking story.