Bilateral agreements can be a long and winding road

Way back in May 2009, Canada and the European Union (EU), started negotiations on a bilateral trade deal at a special EU – Canada summit in Prague, the proposed agreement to be called the Comprehensive Economic and Trade Agreement (CETA). Today, in late August 2016, CETA is all "done and dusted" but has yet to come into force.

Surely a time frame of over seven years should have been enough to iron out all contentious issues, especially when one considers that CETA was supposed to be the culmination of talks and approaches initiated way, way back at two previous summits in Ottawa, the first in December 2002 and then when an agreed framework was reached in March 2004.

The 2004 Ottawa talks were expected to iron out the terms for the Trade and Investment Enhancement Agreement (TIEA). Packed with good proposals for the benefit of all as befits these fine sounding potential treaties, work continued on this project until 2006 when a mutually agreed "pause" in deliberations came into effect.

Collectively, the then 25-member EU, represented Canada's most important trade and investment partner after the United States, with two-way merchandise trade of C$70 billion and two-way direct investment of C$214 billion (2005 figures).

Wide ranging, the scope of TIEA included "mutual recognition of professional qualifications, financial services, e-commerce, temporary entry...sustainable development, and science and technology". All these had been covered, plus government procurement, sometimes a sensitive topic, without apparently any serious issue, by the third round negotiations in Ottawa between 20 and 23 February 2006.

On the domestic front, after April 2003, the Government of Canada started consultations with various civilian bodies and the provincial and territorial governments and in 2005 started a Strategic Environmental Assessment to include all of these groups, on the implications of TIEA.

What went wrong?! A few points can be noted. It appears that neither the Canadian Government nor the European Commission initiated the Agreement, possibly getting it off to a slow start.

The TIEA was a project by the Canada Europe Roundtable of Business, "CERT", an association of Canadian and European companies founded in 1999 with the aim of influencing the Government of Canada and the European Commission, so as to establish "dynamic transatlantic" bilateral trade and investment free of barriers.

Yet despite well-known members like Alcan, Bombardier, Siemens and Deloitte playing prominent roles with regular meetings and briefs between all private member bodies, and the adoption of the project by Ottawa and Brussels acting through relevant government departments, the very existence of TIEA remained widely unknown throughout Canada and Europe. One gets the feeling that this was particularly true in that all important economic sector of small and medium sized businesses.

Another issue came to light in a survey by CERT of business leaders who had some knowledge of the TIEA initiative, CERT found that 90 per cent of respondents felt that emphasis on tariff barriers was not the big issue and much more the need to eradicate non-tariff barriers.

Canada's federal system meant that Ottawa had to liaise and seek the cooperation of the provincial and territorial governments, whilst the EU Commission had to do likewise with those of the member states – a task not to be underestimated given the multiple objectives, complexity of issues , and trade relation priorities. At this time, British Columbia as an example, concentrated on Far East trade and was prospering whilst Newfoundland was facing recession (or worse) due to the manmade ecological disaster of the collapse of the Grand Banks Cod Fishery.

Last though not least, Canada's economy being closely integrated with that of the United States, required both parties to harmonise their bilateral proposed legislation with what already existed and continued to arise in Canadian-US codes and practices.

A real world example of this was brought up by the Toronto Star as the new CETA agreement was supposed to be in the final lap, in an April 2014 piece, asking: "...whether Canadian-exported cars with a mix of Canadian and United States parts are eligible for tariff reductions under CETA?"

After late 2006, TIEA was allowed to wither on the vine. There had been bilateral agreements between the EU and Canada both before, during and since the TIEA negotiations – Customs Cooperation (1997), Veterinary Agreement (1999), Wine and Spirits (2003), Civil Aviation Safety (2009), to name a few, but nothing of such scope.

Both sides however, started "initial" talks on joint studies at a Berlin Summit in June 2007, which by October 2011 had lasted nine rounds and in 2012, both sides agreed these talks be given "priority" status! September 2014 saw "the leaders release the completed text of the (CETA) Agreement" and February this year, the legal review of the text.

The Government of Canada's latest forecast is that CETA will bring a 20 per cent boost to bilateral trade with the EU and an increase of C$12 billion in the country's GDP. Although the Agreement is far more ranging that trade, the website gives it pride of place:

"Did you know?

Of the EU's more than 9,000 tariff lines, approximately 98 per cent will be duty free on the very first day the Canada – EU agreement comes into force. By comparison, only 29 per cent of tariff lines were duty-free on the first day that NAFTA took effect."

Looks like Canada is all set to go! There's widespread approval and Prime Minister Justin Trudeau heads a big Liberal majority and would be able to come to Brussels after the European Council meets on 20 -21 October to sign on the dotted line.

Great! At long last!

Well, maybe not. Apparently, at least six countries in the EU have issues with parts of the Agreement and might delay, if not block ratification. Britain, after Article 50 is triggered, be warned.

I suppose there's always another year.