Canada-EU FTA Talks Proceed, But Obstacles Lie Ahead

26 January 2011

Despite a number of potential obstacles, Canada is confident that it will sign a bilateral free trade agreement with the EU by the end of the year, a senior Canadian official said following a round of negotiations last week.

Ross Hornby, Canada's ambassador to the EU, told a Brussels audience on Monday that the two sides had made "rapid progress" since starting talks in 2009, according to a report in, a news service based in the EU capital.

Nevertheless, several sticking points remain, notably on government procurement, services, and intellectual property. The Montreal Gazette reported this week that a key difference on services is Canada's support for a "negative list" approach to services liberalisation, under which markets would be opened to companies from the FTA partner in all sectors except those specifically excluded.  The EU favours a "positive list" that would identify all sectors and sub-sectors being liberalised; it believes this approach will give it more control over services that emerge or become more prominent in the future.

Varying degrees of enthusiasm from different Canadian provinces has affected the talks on opening up government procurement to companies from the other side of the Atlantic, according to the Vancouver Sun. It cited a business lobby group as saying that Western Canadian provinces were keener than Ontario and Quebec to open public procurement contracts to European companies.

Another point of contention in the negotiations is intellectual property protections resulting from the agreement, and their potential implications for drug prices. Canadian generic drug manufacturers warn that changes to Canadian drug patent protection similar to those sought by the EU under the prospective deal - extended periods of market exclusivity to offset time lost to regulatory delays, and longer protection periods for clinical test data - would increase drug prices, benefiting brand-name pharmaceutical companies (many of them European) at the expense of Canadian businesses and the country's publicly funded healthcare system. Some Canadian business groups support similar changes in order to attract pharmaceutical investment to the country.

In Brussels, Canadian Ambassador Hornby was speaking an event to mark a November agreement between Ottawa and the EU that resolved a WTO dispute over beef trade, a longstanding irritant in bilateral trade relations.

The next round of negotiations between Canadian and EU officials is scheduled for April.

ICTSD reporting; "Statement from the Canadian Generic Pharmaceutical Association Regarding Canadian Chamber of Commerce Report on Intellectual Property in the Pharmaceutical Sector," CNW GROUP, 19 January 2011; "Top Canadian official says FTA deal with the EU is imminent," THE PARLIAMENT.COM, 24 January 2011; "Ont., Que. Concerns holding up EU trade talks, roundtable says," THE VANCOUVER SUN, 14 January 2011; "EU nations reluctant to liberalize trade in services," MONTREAL GAZETTE, 26 January 2011; "Canada needs tougher drug patent protection: report," THE GLOBE AND MAIL, 19 January 2011.

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