What’s the hold-up? Why hasn’t it been done by now? Which side is to blame?
These questions are being asked, at least in the news media, of the Canada-European free trade and investment deal that ought to have been completed some time ago. Ought to have been – but for the nature of the governments doing the negotiations.
Yes, there are difficult issues because they upset vested interests on both sides. Such is the nature of free trade. Some groups that have relied on protection to build market share, profits or high labour costs shudder at seeing their position diluted or lost.
The lobby for Canada-managed agricultural sectors (eggs, poultry and milk) shrieks at the prospect of small increases in the quota for European products. Meanwhile, European beef producers run to the governments of France and Ireland to protect themselves against more imported Canadian beef.
And so on: Some provinces seek to protect their ability to steer procurement decisions to local firms. France wants to protect its “cultural industries.” (Against what – films from Quebec?) Brand-name pharmaceutical companies (many of them based in Europe) want additional patent protection in Canada. Newfoundland smarts over fish access to Europe and remains angry over European attitudes to the seal hunt.
Both sides are frustrated. Quite predictably, the European and Canadian sides have sought in recent days to explain through media leaks why things have taken so long and why the other side is being unreasonable.
This sort of behaviour is as predictable as Ottawa insisting it will not sign a deal against the “interests of Canada,” a highly elastic phrase that means very little. Canada must pose as a tough negotiating partner, since the negotiations get more media play than in Europe. Still, the general public hardly knows the negotiations are happening, which means little political downside in Canada if they fail.
There would be downside, however, if the European Union and United States were to beat them to a deal. (Both sides have agreed to talks.) Being left outside such a deal would be very bad indeed for Canada, which puts more pressure on Ottawa.
There is something structural in these negotiations that explains the delays.
The EU has no James Baker. Canadians with a sense of history might remember that the final stages of the Canada-U.S. talks featured what we are now seeing in the Canada-EU dynamic: leaks, charges of lack of attention and bad faith, threats to walk away (on the Canadian side).
The talks went down to the wire, but on the American side, president Ronald Reagan was supportive. Mr. Baker, his treasury secretary, was empowered to make the last-minute compromise to clinch the deal. Mr. Baker had authority and he used it.
In the EU, nobody speaks for Europe, as Henry Kissinger might have said. There is a duly authorized negotiating team, but there are also 27 national governments whose interests and voices must be heeded. The EU government is empowered to negotiate trade agreements, but national governments can give instructions or lodge objections, so negotiators must always be looking over their shoulders.
In Canada, all important matters go through the Prime Minister’s Office, such is the nature of the government’s centralized command structure. The man who was stick-handling the EU file for the PMO was Nigel Wright, who recently resigned.
With Mr. Wright gone, there is nobody to ride herd on the file, except the Prime Minister himself. What often happens in Mr. Harper’s Ottawa is that so much lands on his desk that files get delayed and decisions back up. His ministers sound and look as if they are authorized to negotiate, but they have to check back constantly with the PMO.
Ottawa has to negotiate files with the provinces. Negotiations get complicated when provinces decide they want this or that, or are not willing to yield on certain issues.
The EU and Canada insist they want a deal. The nature of their governments makes it difficult to conclude one.