'We are ready': Canada-Europe trade deal set to kick in, mostly, by July 1
After many delays as the EU ratified CETA, Europe is waiting for Canada to implement the agreement
Proponents of Canada's trade deal with the European Union will soon find out if eight years of negotiations and lobbying were worth it.
Canada is preparing to provisionally apply the Comprehensive Economic and Trade Agreement (CETA) by July 1.
"We are ready on the European side," the EU's trade commissioner Cecilia Malmstrom said on a visit to Ottawa last Tuesday to promote the deal.
Now it's the EU's turn to wait for Canada.
After CETA's successful ratification vote in February, the EU suggested it could be provisionally applied by April 1.
Malstrom now says the agreement will enter into force "within weeks."
"We have done our work," she said. "We don't see any delays with this."
Or any more delays, she could have said.
Negotiations ended in 2014. But when opposition to the controversial investment clause emerged in Europe, Canada agreed to revisions a year ago.
More "clarifications" were required when the signing ceremony in October was nearly undone by last-minute brinksmanship by the Wallonia region of Belgium, which wanted changes to agricultural and other provisions.
In Canada, the federal cabinet ratifies CETA, so unlike in Europe, there's no voting drama here.
The legislation to bring Canada's laws and regulations into compliance, C-30, is now before the Senate foreign affairs and trade committee.
It meets Wednesday and Thursday, with International Trade Minister François-Philippe Champagne and senior officials expected as witnesses.
A few clauses of the bill were tweaked in mostly technical ways during the Commons committee's review. There's no sign of senators holding it up.
Provinces and territories have to comply too.
Ontario and Quebec needed to legislate changes — Ontario has done so and the process is underway in Quebec (but expected to pass.) Other provinces will amend regulations and policies by cabinet order.
The heat's on to wrap this up before legislators break for the summer.
Then diplomatic notes will be exchanged, fixing a date for provisional application, likely no later than July 1.
New investment court on hold
CETA's being implemented in two stages — about 95 per cent of it now, the rest later — because of a complex jurisdictional battle still playing out in Europe.
A few measures, some argue, fall outside the European Commission's purview, including the reworked investor court system that allows companies to sue governments for decisions that unfairly damage their business interests.
For both legal and political reasons, these clauses are on hold until 38 national legislatures (and a few regional ones) vote and hold referendums across 27 of the 28 member countries. (Malta doesn't require a vote.)
Minister Champagne meets with <a href="https://twitter.com/Latvian_MFA">@Latvian_MFA</a> in Ottawa. Latvia is the first <a href="https://twitter.com/hashtag/EU?src=hash">#EU</a> member to ratify <a href="https://twitter.com/hashtag/CETA?src=hash">#CETA</a> <a href="https://t.co/3Qb2cv2QJA">pic.twitter.com/3Qb2cv2QJA</a>—@CanadaTrade
The Czech Republic may be next. Malmstrom said others will follow before summer.
Minister <a href="https://twitter.com/ZaoralekL">@ZaoralekL</a> also shared with me that he expects <a href="https://twitter.com/hashtag/CETA?src=hash">#CETA</a> ratification by <a href="https://twitter.com/hashtag/Czech?src=hash">#Czech</a> parliament as early as May 2017! <a href="https://t.co/dtBF8lhx6Z">pic.twitter.com/dtBF8lhx6Z</a>—@cafreeland
"In a huge majority of countries, it will be no problem," the trade commissioner said. "There are a few countries where this is still controversial," but over time proponents will "show that CETA is not actually the end of democracy, it's a good deal."
"All member countries have promised to do their utmost to get it ratified," she said.
If there's a "no" vote somewhere, they'll figure it out, she said. "That's what makes European politics so exciting!"
Ratifying the EU's trade deal with South Korea took more than four years. But how long CETA takes may not concern Canadians.
Much of what benefits businesses and consumers won't wait, including an immediate end to 98 per cent of tariffs, more access to previously restricted goods, chances to bid on each other's government contracts and improved labour mobility.
The few tariffs that will remain are mostly on agricultural products. (This chart offers more detail.)
Most goods will become duty-free, including clothing or footwear that has 10-20 per cent tariffs now. Tariffs on passenger cars phase out over seven years.
But as summer approaches, exactly how trade will be liberalized for two commodities that drove the toughest bargaining isn't quite resolved.
Canada agreed to import 18,500 tonnes of EU cheeses annually, a volume representing about two per cent of its otherwise protected dairy market.
Who gets to import it — and profit? Trade minister Champagne hasn't said yet.
"We've been hearing for weeks that it's coming soon," said Jacques Lefebvre, the president of the Dairy Processors Association of Canada, concerned about the short timeline to prepare.
"We were close to decision with the previous minister, but then there was a (cabinet) shuffle," he said.
Existing importers and retailers are lobbying hard. But Canadian farmers and processors argue that since their profits are threatened by the new EU cheese, they should get a share of the import quota.
CETA specifies that 30 per cent of the quota must go to businesses who don't currently import cheese.
An announcement by the trade minister next month will set up what consumers see on grocery shelves.
Will previously-hard-to-find European cheeses appear alongside Canadian ones? Or will cheaper imports simply bump off domestic products?
Red tape for meat
Other farmers see a different challenge: European food safety standards.
Europe has agreed to import exponentially more Canadian meat: The annual quota for beef rises from 15,000 tonnes to 65,000 tonnes. For pork, from 6,000 to over 80,000 tonnes.
It's a thin slice of a huge market — under one per cent of what Europeans eat.
But since Canada's been shut out for decades, it's a big deal. Livestock farmers need new customers as their top buyers, the Americans, make trade threats.
However, a long-running debate over food safety standards leaves most meat plants uncertified for EU exports. A slow, scientific process to prove Canada's methods work won't be done before July.
Plus, only a few dozen farms do all the paperwork and inspections the EU requires to certify animals as free of hormones and food additives. Hundreds need to start. And expand their herds.
Fortunately, this quota phases in over five years.
"We're not panicking," says John Masswohl, a spokesman for the Canadian Cattlemen's Association. "We'll take the time. We'll get it done right."
"This agreement is about the long-term potential, and about being transformative," he said. "It's becoming real now, isn't it?"