EU-Canada deal focuses on tariff cuts

Date: 23/05/1996

By Elizabeth Wise

DETERMINED to construct a second transatlantic bridge as quickly as the one completed last Christmas between the EU and the US, European and Canadian negotiators are putting the final touches to the framework that will support their new partnership.

After what is expected to be the final round of talks next Tuesday (28 May), both sides hope to have an action plan ready for approval by Union leaders when they meet in Florence in June and for signature at an EU-Canada summit shortly thereafter.

A few points still need ironing out, however, primarily in agreeing principles for reducing import tariffs on both sides.

Any idea of establishing a free trade zone - as called for by Canadian Prime Minister Jean Chrétien in 1994 - has been abandoned, but Canada is looking for market openings in Europe and has advocated tariff cuts during negotiations with Union officials. “Our goals are much more modest than they were a year and a half ago,” said a Canadian diplomat.

Yet even these are running into some resistance from the EU side, notably from French, Italian and Spanish officials worried that tariff cuts now could lead to more in future.

EU governments recently turned down Mexico's request for free trade, fearing that any trade concessions made would then have to be extended to other members of the World Trade Organisation (WTO).

Although they could agree to some liberalisation of trade with Mexico because the country's farming sector poses no threat to EU producers, any trade pact with Canada or the US involving agriculture would introduce real competition for European farmers.

Both sides are committed to making some tariff cuts, however, in keeping with their pledges to contribute to the WTO's ongoing drive to accelerate tariff reductions among members. On a recent visit to Ottawa, German Foreign Minister Klaus Kinkel “made the right noises”, said the Canadian diplomat, adding: “We will have something that goes in the right direction.”

As an alternative to using tariff cuts to remove trade barriers, the two sides are already working on bringing their standards into line.

The proposed partnership declaration will add political impetus to that, setting timetables for future accords on veterinary standards, customs policies and competition rules.

Negotiators have avoided conflict over one tricky commodity in transatlantic trade relations - audiovisual products - by treating them in the context of bilateral cooperation on culture and preserving linguistic diversity rather than including them in the chapter dealing with market openings.

However, one big stumbling block remains - that of fishing rights. The Union and Canada officially ended a period of shaky relations in April 1995 when they reached an agreement on catch allotments for Greenland halibut in the North Atlantic waters off Newfoundland, but the long drawn-out dispute has left a bitter taste in European mouths.

In drafting the fishing clauses of the new transatlantic agreement, Canadian negotiators say they are seeking “a forward-looking orientation”. But they admit the fisheries discussions, which include negotiations on conservation in general, ratifying UN resolutions and agreeing working methods within the North Atlantic Fisheries Organisation (NAFO), are likely to be the last to be concluded.

The political declaration that will precede the action plan is a much easier task and is virtually complete, according to officials.

Teams led by Commission Director General Horst Krenzler and Canada's Deputy Foreign Minister Gordon Smith have already exchanged drafts and seem to be in agreement. The declaration will be more concise than the lengthy chapter in the EU-US agreement, which covered most of the world from Bosnia and Cuba to the Middle East, in its pledge for two-way consultation.

The Union and Ottawa will seek common positions within multilateral fora, as well as agreeing on how to make institutions such as the United Nations and the Organisation for Security and Cooperation in Europe (OSCE) more effective.

“Our views and the European views are very close,” said the Canadian diplomat.

Unlike the EU-US action plan, the Canadian agreement does not put into writing the need for a joint assessment of humanitarian aid needs around the world, because, said the diplomat, “we'll just do it”.

In the same spirit of conciseness, the action plan sticks to concrete measures and also gives an added impetus to existing EU-Canada agreements in the fields of education, training and research.

Ambassador Jacques Roy, Canada's envoy to the EU, has said environmental issues will also be a key concern.

Both sides have made proposals for strengthened bilateral cooperation on trade and the environment, in addition to working together within international fora.

However, the Commission and Canadian negotiators are still struggling with the thorny issue of how to draft clauses for the agreement which would make their joint initiatives on immigration, asylum and crime-fighting part of a trilateral effort with the US.

Though a planned visit by former Italian Prime Minister Lamberto Dini to Canada never materialised because of domestic Italian politics, Dini met Chrétien in the margins of the anti-terrorism summit in Sharm el-Sheikh, Egypt, in March and both agreed to try to conclude their transatlantic deal before the Italy's EU presidency expires at the end of next month.

Italian officials want the initiative, which began with a joint declaration by former Prime Ministers Giulio Andreotti and Brian Mulroney in Rome in 1990, to “endow their mutual relations with a long-term perspective”, to be drawn full circle - if possible - in Rome in June.