Canada and the Comprehensive Economic and Trade Agreement

with the European Union (CETA) by Maj (ret'd) CORNELIU. CHISU, CD, PMSC, FEC, CET, P. Eng. Former Member of Parliament Pickering-Scarborough East Every September since 2017, Canada and the European Union toast their now five-year-old Comprehensive Economic and Trade Agreement (CETA). Statements from both sides combine data showing increased two-way trade with heartfelt expressions of the shared principles that are said to be enhanced and put to work by the deal. Great optimism! However, the rhetoric and the statistical numbers give us only a partial and, in some cases, a very misleading picture of how the Canada-EU trade deal works and to whose benefit. In some areas, the effect of CETA in Canada has been worse than we predicted it would be before the deal was signed, and the government has done nothing to correct it. For example, patents on brand name drugs are getting longer in Canada. We don't yet know how much that will cost public and private drug plans, but the best guesses out there suggest it will be a lot. Longer patents mean longer delays for cheaper generic versions of the same drugs. This patent term restoration only applies to drugs approved after CETA came into force in 2017. Generic versions of those drugs will only begin to hit the Canadian market in 2023 and we cannot know how they will be priced or how well they will sell. Therefore, it is difficult to accurately predict how much annual drug expenditures will go up due to CETA. What we do know is that, to date, Health Canada has granted patent term extensions-officially called certificates of supplementary protection, or CSPs-to 71 of 93 applications. In 62 of the 71 cases in which a CSP was issued (87%), the brand name drug patent was lengthened by the maximum of two years. Why would Canada agree to such a costly concession to the EU and Big Pharma generally? The official reasoning is that stronger intellectual property rights attract investment and jobs in innovative sectors like pharma and the life sciences. However, to date we have not seen such a trend, and our drug procurement problems during the pandemic confirmed it. In fact, at this point, what began with a promise to protect Canadians has ended up with a commitment to support pharmaceutical companies. Mostly foreign brand-name pharmaceutical companies have increased their power and profits at the expense of Canadian drug consumers. Another area which was much heralded in the negotiations was meat exports. Here Canada's performance has been, well, non-existent. Despite increases in their duty-free quotas, beef and pork exports have stagnated. Canadian beef has hardly used any of its allotted export quota and pork exports are not worth mentioning. Imports of European beef and veal into Canada, on the other hand, have grown considerably, while the doubling of European cheese import quotas is regularly filled each year by Canadian importers. The EU claims that if Canada has not yet managed to benefit fully from its beef and pork tariff rate quotas, it was related to the need to ensure respect of EU sanitary and phytosanitary standards and, in particular, the ban on the use of growth hormones. Canadian producers of meat products could abide by those EU food standards if they wanted to, but elected to complain about them instead. With the Canadian government's help, they have voiced their complaints in bilateral CETA committees and in the media. Here again, the government has shown its inability to act. One of CETA's most controversial elements in Europe, as in Canada, is the agreement's proposed investment court system. This would be a more permanent version of the ad hoc investor-state dispute settlement (ISDS) tribunals empowered by international trade and investment treaties to hear corporate complaints against government policy. Canada agreed to remove ISDS from the "New NAFTA," or CUSMA, partly because of the chilling effect it can have on trade policy. However, the Trudeau government is dead set on making sure CETA's investment court system sees the light of day. That can only happen when all EU member states have fully ratified the agreement, and just over a dozen, including Germany, have yet to do. The idea that CETA would be a "living agreement," able to grow and adapt with the times, was sold to the public as a great benefit, again with progressive potential. Currently there are 20 CETA committees populated by public servants that meet at least once a year to discuss how the agreement is working in areas such as food standards, agricultural trade, biotechnology, access to raw materials, regulatory cooperation, etc. Canada and the EU use these committees to raise trade irritants with each other. Meeting agendas are published in advance and summaries posted afterwards, but, largely, this work takes place below the radar for most people and elected politicians. So again, the public servants are making the decisions rather than the elected officials. The latter continue to trust the public service blindly, and authorize their decisions without necessarily knowing what they are signing. CETA yearly celebrations make for convenient political and public relations exercises. The agreement itself might be better forgotten if we didn't have to live with its bad effects and unbalanced outcomes. In conclusion, in CETA Canada's procurement and industrial strategy options are unreasonably compromised compared to those of other countries. The animal agriculture export quotas are going unfilled despite using up much of Canada's leverage in the EU negotiations. Furthermore, as the burgeoning bureaucracy is rapidly getting out of control, these so called low-key CETA committees have created new avenues for corporate lobbying on both sides of the Atlantic. So the question: Is the Canadian government doing anything to help Canadians achieve real benefits in the CETA?