Ottawa reluctant to renegotiate EU trade deal in wake of Brexit vote

Canada and the European Union are both reluctant to reopen their landmark trade deal should the United Kingdom quit the EU, meaning the concessions Ottawa yielded to achieve the agreement would remain the same even as the size of the prospective market shrinks.

Explainer: What you need to know about CETA

The Trudeau government says it expects more than 90 per cent of the Canada-EU deal to take effect in 2017 after what it predicts will be decisions in favour of the agreement at the Council of the European Union and in the European Parliament.

On June 23, a slim majority of the British electorate voted to quit the European Union, a result that has sparked uncertainty over the country's future relationship with Europe and the world.

The Canada-EU deal was predicated on Britain being part of the European Union and concessions made by Canada envisioned these as worthwhile tradeoffs for access to 500 million consumers. Britain, with more than 60 million citizens, is responsible for close to 20 per cent of the EU's annual economic impact.

A senior Canadian government official assigned to brief media Wednesday said both jurisdictions are afraid the agreement could come apart were Ottawa and Brussels to try to whittle down concessions in the deal to reflect the British exit.

"The main concern here is that if you start to … open the door to renegotiating some of those numbers or some of those areas, then there is a very strong risk that the entire agreement starts to unravel," the senior official said.

He spoke on the condition, laid down by International Trade Minister Chrystia Freeland's office, that he not be identified.

Canada does not want to renegotiate the deal, the official said.

"That is entirely our view. We've had some indications from the European side that is their view, too," the senior official said.

"If you leave the agreement as it is, even if some day the U.K. is not a part of this – which is still a question mark – then you would still have an agreement with the EU that would be of an even higher level of ambition. That is what we would rather end up with then trying to tinker with it."

The official ruled out further changes to the CETA to accommodate any remaining disaffection in Europe.

"We do not anticipate any further reopening of the agreement from here on in. We have reached a final legal agreement. Both sides have clearly stated this is the final legal agreement and that is what is going to go through the ratification process."

The Canada-EU deal, the most far-reaching deal this country has concluded in decades, would eliminate duties on tens of thousands of products, covering more than 95 per cent of everything Canada now sells to Europe, as well as dismantle a raft of non-tariff barriers to commerce. It would provide Canada-based auto assemblers, as well as beef and pork producers, with significant access to EU markets.

Canada has, as part of the deal, agreed to grant tariff-free access for another 16,800 tonnes of cheese from Europe.

Canadian dairy farmers say their main concern is securing taxpayer compensation for any impact on their livelihood from the influx of new European cheese. They say the government has yet to make an offer.

Isabelle Bouchard, spokesperson for the Dairy Farmers of Canada, said producers would want the cheese access lowered if talks ever restarted, but she added this was not something they are requesting.

"Of course if there are any negotiations at all on on dairy, we want it down, of course, but we're not asking to renegotiate right now a deal that has not even been signed."

Newfoundland has been negotiating with Ottawa over compensation for the impact it will feel from the Canada-EU deal. Under the pact, Newfoundland must jettison what are called minimum processing requirements (MPRs), aimed at protecting local fish plant jobs, which stipulate how much of the fish brought ashore in the province must be processed there.

Darrell Pasloski, Yukon Premier and the incoming chair of the Council of the Federation, a congress of premiers and territorial leaders, said he has not detected any new anxiety about the Canada-EU deal. "As a free-trading country, such deals are vitally important for creating good strong jobs and growth and prosperity."