With frustration mounting, PM-Barroso put CETA talks on road to success
Oct 20, 2013 / 1:20 pm
OTTAWA - If there was a make-or-break moment on the long, winding road to Friday's culmination of a free trade agreement with Europe, it might have come Sept 6 in the most unlikely of places.
It was fair to say that Canadian negotiators had been growing increasingly restless with the pace of talks that had begun almost four years earlier and had already missed several unofficial deadlines.
While both sides were anxious to cement an agreement that justified the thousands of hours of work by officials, tens of thousands of air miles across the Atlantic on the part of officials and politicians, the fact was that the political heat was greatest on Harper and Trade Minister Ed Fast.
The so-called Comprehensive Economic and Trade Agreement, or CETA, was much bigger news in Canada than it was in Europe, attracting more media scrutiny â€” much of it detailing Canadian compromises â€” and more business attention, often putting pressure on Ottawa to get on with it before the U.S. beat Canada to the punch with its own deal.
And the Europeans knew it. Since February, key players such as EU trade chief Karel De Gucht had periodically gone public with their assessment that Canada was stalling, telling reporters the deal was on the table but Harper was refusing to sign.
The EU's ambassador to Ottawa, Matthias Brinkmann, even declared that Europe was willing to give Canadian beef farmers more than 40,000 tonnes of quota, far more than they were selling now, if only Ottawa would take yes for an answer.
The problem was that the deal on the table was unsalable in Canada, particularly with key provinces and sectors, said Canadian officials.
The Europeans were still not offering enough quota on beef to justify Canadian producers making the investment to convert to hormone-free product. And the EU was still demanding up to 25,000 tonnes quota for European cheese producers, something that Ontario and Quebec, with their strong dairy lobby, would balk at.
As well, despite Brinkmann's assertion in May that only agricultural issues needed to be resolved, that wasn't quite the whole story, said Canadian officials.
There was still no final signoff on other key issues, such as the auto sector, intellectual property rights, fish and seafood, or even sub-national procurement.
And then there was the complexity of the process. The EU is an economic entity but it is not a nation â€” who had the authority to speak for all 28 governments?
"The trouble was that every time we thought we were making progress on one issue, there would be new demands on another that we thought was settled, and there was no-one in Europe that could make the comprehensive deal," said one Canadian official.
That was not quite the case with Canada. Although provinces and territories would need to sign off, they had been integral to the negotiations from the start and bought into the process at a federal-provincial meet with Fast in February of 2012, declaring "there is no more important Canadian trade negotiating priority today than CETA."
Even the election of the Parti Quebecois' Pauline Marois in September of that year did not deviate from that commitment. The PQ remained at the table, even retaining Pierre Marc Johnson as the province's chief negotiator.
It was against this backdrop that the prime minister travelled to St. Petersburg, Russia in early September for the G20 leaders summit with an important side-mission. He needed to speak to European Commission president Jose Manuel Barroso and break the logjam.
The conversation occurred in an unlikely venue _ inside a temporary structure erected near the Constantine Palace.
Barroso, also anxious to conclude a pact that would serve as a template for the EU's much bigger negotiations with Washington, heard Harper out and immediately understood. From now on, Barroso replied, you deal directly with me and my people.
"That changed everything," said the official, who asked not to be identified. "For the first time we were speaking one-on-one. Before there were too many cooks in the kitchen.
"From that point on we were in contact almost every day, sometimes two or three times a day, by telephone or video conference."
The negotiations involved political operatives in Harper's and Fast's office, as well as trade officials.
In Friday's announcement ceremony in Brussels, the prime minister praised the work of officials, including political staffers in both his office and Fast's, singling Andrea VanVugt, his foreign affairs and trade policy adviser who had recently gone on maternity leave.
The pieces of the agreement came together over the next five weeks. In the end the Europeans lowered their demands on cheese and increased the quota on beef and pork. Compromises were reached on autos, intellectual property protection and procurement.
Still, there was no deal unless the provinces came on side and that was not assured until the final days.
The cheese quota was particularly problematic. It was sure to cause a stir among dairy farmers, particularly in Ontario and Quebec, a segment that was used to getting its way in trade negotiations.
As the Quebec negotiator Johnson has revealed, the final number on cheese imports â€” 17,700 tonnes â€” was somewhat of a shock, even if it was below the original EU demand.
Johnson was sitting down to a Thanksgiving dinner when he got the bad news.
"We said, 'Are we hearing this right? Maybe there's one too many zeros?'"
Over the next few days, Fast got on the phone with the provinces to work out compensation scenarios for cheese farmers and a change in intellectual property protection that would delay the introduction of cheaper generic drugs by up to two years in Canada. Provinces fear this could add about $1 billion to their health plans in about a decade.
But even on the eve of the announcement, Ontario issued a statement that it would also seek compensation for changes required on wine and spirits imports, which Ottawa has rejected.
Still, there was no turning back now. On Wednesday, the prime minister had decided to skip the next day's question period in the House of Commons, the first following the throne speech, to fly to Brussels for an announcement ceremony with Barroso.
Delaying further only risked backsliding, on both sides of the Atlantic.
In Brussels, Harper publicly declared his government would work out compensation with dairy farmers and the provinces. In return, provincial and territorial governments quickly declared their support for CETA.
"That's when we knew we had a deal for sure," said the official.
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