Premier Jean Charest is described as the savior of Canada-European Union free trade talks in this month’s l’Actualité magazine. It’s an honour that will come back to bite him. Because despite Charest’s belief the negotiations will increase provincial political and economic autonomy within Canada, the only possible outcome is the exact opposite.

If Europe gets its way, Canada’s provinces and cities will lose considerable political flexibility, including the room to set economic, environmental and other social priorities and public policies that interfere, however superficially, with global capital and investment flows. To the extent that the Quebec and also the Ontario government places many conditions on economic activity to encourage local development — think of McGuinty’s minimum local content rules on clean energy projects — these provinces stand to lose more than others from the European trade talks.

Negotiations toward a Comprehensive Economic and Trade Agreement, or free trade-plus deal between Canada and the European Union started this week in Ottawa. Some 35 EU negotiators will put on their best poker faces as they lay out a list of federal and provincial policies they’d like to see eliminated in order to boost European access to Canadian markets.

Of course Canada’s negotiators will be doing the same, hoping, for example, to convince the Europeans they should be eating more genetically modified produce (which they revile) and relaxing quotas on Canadian beef imports (which were put in place because of our growth hormones).

Quebec-based engineering and firm SNC Lavalin and provincial favourite son Paul Desmarais Jr. of Power Financial Corporation, among 100 other Canadian and European companies on a statement in support of a NAFTA-plus bilateral agreement, would also like to see reduced EU state-level barriers to services so they can expand their already formidable empires. (Desmarais will be anxious to improve market access in Canada for Power Corp’s European holdings, including French private water giant Suez, which would benefit from increased access to public water contracts.)

But it’s important to realize that, as during free trade talks with the United States in the mid-1980s, Canada is the underdog. We have less to offer the Europeans and, not surprisingly, much more to lose. The scope of negotiations is huge, politically sensitive and to date largely shielded from public scrutiny. But it goes on with enthusiastic support from some premiers, including Charest and McGuinty. Why is this?

According to the article in l’Actualité this month, the Europeans walked away from preliminary talks in 2006 because of difficult jurisdictional issues with the provinces. Three months later, Charest was being wined and dined by the likes of Alcan, Bombardier and SNC Lavalin, who convinced him to take up their cause.

In January 2007, he went on the offensive, enlisting McGuinty and former Manitoba premier (now U.S. ambassador) Gary Doer. Persistent lobbying from Quebec ministers and provincial diplomats in Europe, including tag-team sessions with Sandra Pupatello, Ontario’s minister of economic development, eventually convinced the EU Trade Commission the provinces would cooperate. By mid-2008, Europe was talking to the Harper government again, and insisting that McGuinty, Charest and the other premiers have a seat at the table.

The reason provincial participation was so important to the EU is because so much of what they are asking of Canada — access to provincial and municipal public contracts for European companies, the removal of foreign investment caps (particularly in telecommunications and finance), taxation policy reforms, a single national securities regulator and enhanced services (including health and possibly water) liberalization — involve provincial jurisdictions.

Even sacred cows like culture and supply management, which curbs overproduction of eggs, dairy and poultry in Ontario and Quebec, provides stable prices for consumers and stable incomes for farmers, are in Europe’s crosshairs — despite reassurances from the federal government that the popular and successful practice is safe.

Also contentious are provincial spending powers. NAFTA’s procurement chapter prohibits favouring Canadian or provincial companies when spending public money on goods or services over a certain threshold. Like the World Trade Organization’s procurement agreement, NAFTA also forbids many local minimum content rules or local hiring requirements. Provincial exemptions from these rules were crucial in developing Ontario’s internationally recognized wine industry. We’d be crazy to give them up.

Consequently, sustainable and ethical purchasing policies that distinguish between goods or services based on how they were produced have been successfully challenged under the WTO as unreasonable barriers to trade — showing the extent to which trade flows are prioritized over all other societal goals under these arrangements.

Neither NAFTA nor the WTO procurement agreement applies to Canadian provinces or cities, which is a bone of contention not just for the Europeans, but also a rallying call for corporate lobby groups in Canada who are successfully using the “Buy American” controversy to push for unnecessary limits on provincial and municipal government spending powers. These powers are a rare benefit in a world of ever shrinking democratic control over markets — not some evil to be cleansed with more corporate welfare.

Charest is talking out of both sides of his mouth by at once claiming that Quebec will come out of these European talks more powerful while at the same time endorsing new limits on the scope of legitimate government action to improve local economies and protect the environment. We have yet to hear from McGuinty about how he really feels.

The only clear winners from Charest’s heroic efforts to re-start Canada-EU negotiations will be politically powerful corporations inside and outside Quebec, who will benefit from the deregulation and privatization that these bilateral trade and investment negotiations are designed to encourage.

Stuart Trew is the Trade Campaigner for the Council of Canadians. Claude Vaillancourt is General Secretary of l’Association québécoise pour la Taxation des Transactions financières pour l’Aide aux Citoyens (ATTAC-Québec).