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Canada-EU trade talks continue this month, but Canadian ultimatum on beef too tough for EU tastes

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The New Year has barely begun and European trade negotiators are already in Ottawa for more work on a comprehensive, "gold standard" Canada-EU trade and investment deal (CETA). This is according to Inside U.S. Trade, which included a blurb about CETA in a look-ahead piece they ran online this week (subscription only).

"Chief negotiators could meet again in Brussels before the end of January, with a view to bringing together ministers from both sides early this year to finalize tough items like intellectual property protections and agricultural goods trade," said the article. International Trade Minister Ed Fast met European Trade Commissioner Karel De Gucht in November to try to do the same thing then but reports suggest it didn't go so well.

But even though the CETA negotiations appear sluggish, with the Prime Minister missing his self-imposed year-end deadline for an agreement, the problem might be very specific: meat. If that's the case, an injection of steroids is (literally) the last thing the Harper government needs to get things moving.

Just before the holidays, former Canadian trade negotiator Peter Clark told the Wall Street Journal he expects the Canada-EU negotiations to continue for another three months but that the EU will want to wrap up before then so it can start (more important) "comprehensive" trade and investment talks with the United States. At about the same time, Postmedia reported that the CETA talks had "hit a hefty roadblock" with Canada and the EU "battling over how much access Canadian beef, pork and other agricultural producers should be granted to the European market."

We've known from the beginning that pork and beef are (excuse the pun) red meat issues for western provinces and the Harper government in the CETA negotiations, and obviously an important export sector generally in the Canadian economy. But as Maude Barlow and Paul Moist write in the Globe and Mail this week, the entire agreement appears to hinge on satisfying that one sector.

Leaked documents from November, which were posted to the La Presse website, suggest that Canada has made public procurement, intellectual property (drugs and copyright), dairy imports and other issues important to the EU contingent on immediate improved access to Europe for Canadian meat.

European negotiators are confused. The EU probably wouldn't have a problem in principle with more Canadian meat on European dinner tables. It's just that most Canadian beef and pork contains hormones that are banned from the European market.

This is a red-line issue for the EU, meaning negotiators cannot cross it. To meet the Harper government's request, not only would the EU have to increase Canadian quotas for beef and pork, as they did once recently, they would also have to relax health standards that are universally supported by EU member states and the public.

The EU is not ready to do this. In the late 1990s, Canada and the U.S. successfully challenged the European ban on meats containing artificial hormones at the World Trade Organization under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). But in a notable case of the public interest trumping the profit "rights" of industrial meat producers, Europe maintains the measures in place despite Canadian and U.S. sanctions on some European imports.

CETA could lift quotas for Canadian meat raised without hormones or other prohibited (in the EU) drugs like Ractopamine in pork, but it would take years for Canadian meat producers to develop a hormone-free export market to satisfy any increased opportunities in Europe. And from speaking to people close to the negotiations, this is puzzling the Europeans.

It will also not be an easy problem for the Harper government to solve. For example, the PM might not be able to sell a deal to the meat sector that opens imaginary new access for Canadian producers. They represent an important western and (currently) substantially Conservative constituency with influence in the Cabinet and provincially. Alberta's minister of intergovernmental relations, Cal Dallas, told Postmedia last month, "We've moved a mile in our mind on a whole number of issues, providing access provincially to items that were of key interest to the Europeans, and we continue to reiterate the needs that we have."

For all the complaints out there that Canada's supply managed farming sectors (dairy, poultry, eggs) are hurting Canadian trade opportunities, there is very little said about the Conservative's cozy relationship with Big Meat and its effect on current negotiations with Europe and Asia-Pacific countries in the Trans-Pacific Partnership agreement.

In the first case, Canada is trying to protect a non-trade distorting supply management regime (we don't export eggs or milk, for example) from foreign imports that would undercut the sector, and this is said to undermine a "gold standard" agreement. In the second case with meat, Canada is expected to undermine a non-trade distorting pharmaceutical regime, non-trade related public procurement measures, and other public policies for the sake of modest gains for a couple of other sectors, and this increases the quality of the deal.

I don't get it. I imagine a lot of other people won't either. And that, too, might become more of a problem for Harper as the year moves ahead.

To read this week's Globe and Mail op-ed on CETA by Maude Barlow, national chairperson of the Council of Canadians, and Paul Moist, national president of the Canadian Union of Public Employees, click here.

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