Canada: Canada And Europe To Launch Free Trade Negotiations
Last Updated: January 19 2009

Edited by Milos Barutciski and Jesse Goldman

The Canadian government has initiated preliminary consultations with businesses and other stakeholders with regard to areas of potential interest to be pursued in free trade negotiations with the European Union (EU). This negotiation is potentially the most significant development in Canada’s international trade relations since the North American Free Trade Agreement (NAFTA) came into force in 1994. All indications thus far suggest that the proposed economic agreement would have a broader scope than either Canada’s or the EU’ s existing free trade agreements (FTAs), including NAFTA, thus opening a broader range of business opportunities.

On December 20, 2008, the Department of Foreign Affairs and International Trade (DFAIT) issued a notice soliciting submissions from interested parties to help identify their objectives, concerns and defensive interests in connection with a proposed new economic agreement with the EU. Companies that present their concerns and priorities to DFAIT at an early stage will be better placed to advance their interests in Canada’s opening position in the negotiations and in subsequent stages of the process.

This initiative follows the statement made jointly by Prime Minister Stephen Harper and French President Nicolas Sarkozy on October 17, 2008, when France held the rotating presidency of the EU, announcing that Canada and the EU intend to prepare formal mandates to launch negotiations on an ambitious economic partnership as early as possible in 2009. This announcement was closely followed by the announcement on December 9, 2008, of a multi-phased "Open Skies" agreement intended to greatly liberalize the market for air transport services and investment between Canada and the EU.

Background

With a population of almost 500 million and a GDP greater than €12 trillion, the EU represents an extremely attractive market for Canadian businesses. A new economic agreement between Canada and the EU would off er an immense opportunity for Canadian businesses to diversify into new markets for the supply of goods and services, including sophisticated value-added products and technology.

The EU is Canada’s second largest trading partner, with bilateral trade in goods and services accounting for approximately C$110 billion in 2007. Prior to the present initiative, Canada’s many overtures to the EU to initiate broad-based trade negotiations have failed to elicit engagement from the EU. The fact that Canada was only the EU’ s eleventh largest trading partner and that the Canadian economy is relatively open meant that there was little immediate impetus for the EU to begin negotiations. The EU’ s position began to shift in 2007 when the EU agreed to conduct a joint study with Canada into the costs and benefits of an expanded bilateral economic and trade relationship.

The joint study, Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership, was released on October 17, 2008. The study found that the economic benefits of a comprehensive bilateral FTA would be significant for both Canada and the EU. The benefit to Canada as a result of liberalizing trade in goods and services was projected to be an estimated C$12 billion over the first seven years of liberalization, whereas the benefit to the EU was even greater at approximately C$17 billion over the same period. In addition, the recent stalling of the multilateral trade negotiations under the WTO Doha Round created a further incentive for both Canada and the EU to pursue trade liberalizing initiatives elsewhere.

What’s At Stake

The proposed negotiation is expected to address a very broad agenda from the outset. Specifically, negotiation can be expected to include eff orts to achieve substantial liberalization of:

  • trade in goods, including elimination of customs duties and streamlining of customs procedures, reduction of non-tariff barriers in areas such as import licensing, technical and product standards, mutual recognition and conformity assessment;
  • trade in services, including further market access commitments in sectors not presently covered by either Canada’s or the EU’s commitments under the WTO General Agreement on Trade in Services;

  • investment, including addressing discriminatory provisions and other investment barriers at the provincial level for Canada and by Member States in the EU;
  • government procurement markets at both the provincial and Member State levels;
  • labour mobility, including facilitation of temporary entry and transfers of business personnel; and
  • mutual recognition of professional and technical qualifications.

Other areas such as open skies, enhanced regulatory co-operation, competition policy, environmental protection, climate change and emissions trading, labour rights and human rights, can also be expected to be brought into the negotiations.

The Road Ahead

At present, the Canadian government and the European Commission are engaged in a scoping exercise to determine the range of potential interests that will be affected by the negotiation from both offensive and defensive perspective. The Canadian government has initiated a formal consultation with business and other stakeholders. Although the European Commission has not yet initiated a similar public consultation, EU officials have initiated the process of identifying European negotiating interests. Among other things, senior European officials responsible for conducting the negotiations are expected to travel to Canada in the coming weeks. These developments, as well as statements by the current Czech presidency of the EU of its intention to initiate negotiations in the first half of 2009, indicate that the Canada-EU trade initiative is gaining momentum.

There are, of course, important hurdles to overcome. On the Canadian side, many of the areas that have been identified as prospects for further liberalization, such as procurement, trade in services and professional and technical qualifications, are under provincial jurisdiction. As such, the federal government will need to obtain positive provincial commitments in order to advance its negotiating agenda in these areas. Similarly, many areas of interest to Canada will have to be addressed by the EU’ s Member States, which will have their own interests to protect, notably in controversial areas such as agriculture, geographical indications and the use of genetically modified organisms and hormones in certain agrifood products. The global economic slowdown will also have an impact on the scope and pace of the negotiations, with the prospect of increased economic activity creating incentives for bold action while threatened sectors seek defensive carve-outs, exemptions and longer phase-ins or phase-outs.

On balance, the Canada-EU trade initiative represents the most significant international trade development for Canada in 15 years. The Canadian government’s consultations present an important opportunity for businesses to influence the parameters of the negotiations toward a potentially historic agreement that brings Canada and the EU closer together. For further information about the proposed Canada-EU negotiations, their potential impact on specific sectors or businesses, or responding to the Canadian government’s notice, please contact a member of our International Trade and Investment Practice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Press Releases from this Firm
Recent Content from this Firm
By Martin Kratz
By Martin Kratz
By Sharon Singh, Charlotte Teal, Sarah Gilbert, Thomas McInerney
By Martin Kratz
By Michael Theroux, Laura Gill, Thomas McInerney, Parker Mckibbon
By Vivek Warrier, Alexis Teasdale, Isabel Langlois, Parker Mckibbon
By Darrel Pearson, Claire Kennedy, Margaret M. Kim
By Darrel Pearson, Sabrina Bandali, Jessica Horwitz
By Martin Kratz
By Darrel Pearson, Sabrina Bandali, Jessica Horwitz
Tools
Print
Font Size:
Translation
Channels
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions