Comprehensive Economic and Trade Agreement

This article is about Comprehensive Economic and Trade Agreement. For Comprehensive Employment and Training Act, see Comprehensive Employment and Training Act.

The Comprehensive Economic and Trade Agreement (CETA) is a proposed free trade and copyright agreement between Canada and the European Union. Many of its provisions on copyright are identical to controversial ACTA, which was recently rejected by the European Parliament; this has raised concerns with proponents of internet freedom and civil liberties.

History

CETA is Canada's biggest bilateral initiative since NAFTA. It was hatched as a result of a joint study "Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership" which was released in October 2008. Officials announced the launch of negotiations on May 6, 2009 at the Canada-EU Summit in Prague. This after the Canada-EU Summit in Ottawa on March 18, 2004 where leaders agreed to a framework for a new Canada-EU Trade and Investment Enhancement Agreement (TIEA). The TIEA was intended to move beyond traditional market access issues, to include areas such as trade and investment facilitation, competition, mutual recognition of professional qualifications, financial services, e-commerce, temporary entry, small- and medium-sized enterprises, sustainable development, and sharing science and technology. The TIEA was also to build on a Canada-EU regulatory cooperation framework for promoting bilateral cooperation on approaches to regulatory governance, advancing good regulatory practices and facilitating trade and investment. In addition to lowering barriers, the TIEA was meant to heighten Canadian and European interest in each other’s markets. The TIEA continued until 2006 when Canada and the EU decided to pause negotiations. This led to negotiations on a Comprehensive Economic and Trade Agreement (CETA), and this agreement will go beyond the TIEA toward an agreement with a much broader and more ambitious scope.

Research commissioned by negotiating parties

The EU-Canada Trade Sustainability Impact Assessment (SIA), a three-part study commissioned by the European Commission to independent experts and completed in September 2011, provides a comprehensive prediction on the impacts of CETA. It predicts a number of macro-economic and sector-specific impacts, suggesting the EU may see increases in real GDP of 0.02-0.03% in the long-term from CETA, whereas Canada may see increases of 0.18-0.36%; the Investment section of the report suggests these numbers could be higher when factoring in investment increases. At the sectoral level, the study predicts the greatest gains in output and trade to be stimulated by services liberalization and by the removal of tariffs applied on sensitive agricultural products; it also suggests CETA could have a positive social impact if it includes provisions on the ILO’s Core Labour Standards and Decent Work Agenda. The study details a variety of impacts in various “cross-cutting” components of CETA: it advocates against controversial NAFTA-style ISDS provisions; predicts potentially imbalanced benefits from a government procurement (GP) chapter; assumes CETA will lead to an upward harmonization in IPR regulations, particularly changing Canadian IPR laws; and predicts impacts in terms of competition policy and several other areas.

Economic ties between the EU and Canada

Canada and the EU have a long history of economic cooperation. Comprising 27 Member States with a total population of nearly 500 million and a GDP of over C$19 trillion last year, the European Union (EU) is the world’s largest single market, foreign investor and trader. As an integrated block, the EU represents Canada's second largest trading partner in goods and services. In 2008, Canadian goods and services exports to the EU totalled $52.2 billion, an increase of 3.9% from 2007, and imports from the EU amounted to $62.4 billion.

According to Statistics Canada, the EU is also the second largest source of foreign direct investment (FDI) in Canada, with the stock of FDI amounting to $133.1 billion at the end of 2008. In 2008, the stock of Canada's direct investment in the EU totalled $136.6 billion, and the EU is the destination of 21.4% of Canadian direct investment abroad. According to Eurostat, the EU identified Canada as its third largest destination and its fourth largest source of FDI in 2007.

Copyright provisions

An important and controversial part of the Agreement is stricter enforcement of intellectual property, including liability for Internet Service Providers, a ban on technologies that can be used to circumvent copyright, and other provisions similar to controversial ACTA, DMCA, PIPA, and SOPA, as below:

• Copyright term extension. The current term of copyright law in Canada is life of the author plus 50 years. This is consistent with the term requirements under the Berne Convention. The EU is demanding that Canada add an additional 20 years by making the term life plus 70 years.

• WIPO ratification. The EU is demanding that Canada respect the rights and obligations under the WIPO Internet treaties. The EU only formally ratified those treaties this week.

• Anti-circumvention provisions. The EU is demanding that Canada implement anti-circumvention provisions that include a ban on the distribution of circumvention devices. There is no such requirement in the WIPO Internet treaties.

• ISP Liability provisions. The EU is demanding statutory provisions on ISP liability where they act as mere conduits, cache content, or host content. ISPs would qualify for a statutory safe harbour in appropriate circumstances. There is no three-strikes and you're out language (which presumably originates with the U.S.).

• Enforcement provisions. The EU is demanding that Canada establish a host of new enforcement provisions including measures to preserve evidence, ordering alleged infringers to disclose information on a wide range of issue[s], mandate disclosure of banking information in commercial infringement cases, allow for injunctive relief, and destruction of goods. There is also a full section on new border measures requirements.

• Resale rights. The EU is demanding that Canada implement a new resale right that would provide artists with a royalty based on any resales of their works (subsequent to the first sale).

• Making available or distribution rights. The EU is demanding that Canada implement a distribution or making available right to copyright owners.

These are just the copyright provisions. There are sections dealing with patents, trademarks, designs, and (coming soon) geographical indications. These include:

• requiring Canada to comply with the Trademark Law Treaty (Canada is not a contracting party)

• requiring Canada to accede to the Hague System for the International Registration of Industrial Designs

• creating new legal protections for registered industrial designs including extending the term of protection from the current 10 years to up to 25 years

• requiring Canada to comply with the Patent Law Treaty (Canada has signed but not implemented)

• requiring Canada to establish enhanced protection for data submitted for pharmaceutical patents.

— Dr Michael Geist, Canada Research Chair in Internet and E-commerce Law, University of Ottawa

Potential negative consequences for the environment

According to an opinion column by Maude Barlow, National Chairperson of The Council of Canadians in the Globe and Mail, implementation of the agreement would have serious negative consequences for the environment in both Canada and the European Union.