By Carlo Dade and Christopher Rastrick
In the Globe and Mail
October 26, 2016
The dark cloud over our trade deal with the European Union this week came with an overlooked silver lining: Canada had shown it could manage internal opposition to trade agreements.
When negotiations for the Canada-EU Comprehensive Economic and Trade Agreement began seven years ago, the EU expressed worry that our provinces could refuse to go along with the agreement and waste years of negotiations. Similar concerns have been expressed by potential trade partners in Asia.
Fishermen in Newfoundland, environmental activists in British Columbia, and others were opposed to trade talks with the EU. Various groups and politicians opposed the agreement from the start.
Having the provinces integrated into the negotiating process, however, played a constructive role. Provincial governments tend to be seen as closer to the ground and more attuned to the concerns of their citizens. As a result, the text – while still opposed by some – is generally well received here.
Rather than a Canadian province going rogue on the deal, as the EU feared, it was a Belgian subnational government threatening to waste seven years of hard work. Surely, Canadian trade negotiators couldn’t help but feel the pot had called the kettle black.
The CETA ratification process was never supposed to come to this. Partly as a response to the populist pressure spurred by Brexit and partly by increasing concerns over the nature of the EU’s trade relations with third parties (namely, the United States), EU leadership decided that each member state should have an equal say in CETA’s fate. It was just in July that the EU made it a “mixed agreement,” requiring unanimous approval by all 28 member states.
In Belgium, this required three subnational governments to give approval. One of them, Wallonia, balked.
Whatever the ultimate outcome, Canada has gained something. We leave the CETA process looking like a competent, dependable trading partner, a reputation that will pay dividends in the future.
Western Canada in particular is hoping the news about CETA is being translated into Mandarin and Japanese.
Canada has proven it can negotiate with a unified and coherent position internationally, even when faced with concerns from provinces, sectors and advocacy groups. For all the differences among the provinces, especially in relation to the diversity of dominant industries, Canada can produce an agreement, rally domestic voices around it and deliver on its promises.
Further, Canadian trade negotiators have embraced the reality that negotiations between two or more governments involve give and take. Whether the concerns are from powerhouses like Germany or smaller powers like Bulgaria and the Czech Republic, certain concessions had to be made. Of course, when negotiating with the world’s largest trading bloc, there has to be a higher tolerance for what can be sacrificed. In modern trade negotiations, that means working with subnational governments to build support for these bargains up front, rather than at the last minute, as the EU attempted.
With the CETA negotiations forging a Canadian reputation as a dynamic, pragmatic and responsive trading partner, Canada will be well-positioned to bolster its negotiated trade relationships with the Trans-Pacific Partnership member states should that agreement fail, and spur new negotiations with China.
CETA is a good agreement for Canada, made better by the concessions arising from consultations with those most in touch on the ground, namely the provinces. Those who were going to be most affected had their voices heard. Canada has benefited from this consensus approach, and needs to make this the standard for future trade negotiations.
As we enter tough trade negotiations in Asia, what many thought was a weakness in Canada’s negotiating position – provincial participation – turns out to be a strength.
Carlo Dade is director of the Centre for Trade and Investment Policy. Christopher Rastrick is a policy analyst at the Canada West Foundation.