Sept 27th, 2012 - The negotiations over the Canada - European Union trade agreement may be approaching the final stretch as both sides say they plan to wrap up the CETA talks by the end of the year. The parties have apparently reached agreement on roughly 75 per cent of the text, but the last quarter will require significant political compromise.
According to Michael Geist, an expert from the University of Ottawa, Canadian negotiators recently advised that there remains a sharp divide over issues such as investment rules, financial services, and taxation. Given the ongoing European financial crisis, these issues are particularly sensitive and will raise questions about how much risk the government is willing to accept in order to strike a deal.
The Canadian opposition to the chapter will come from European demands for patent reforms that could result in billions in additional health care costs due to higher pharmaceutical prices. The pharmaceutical demands are one of Europe's top priorities, but Canada has thus far refused to counter the EU proposals, creating a stalemate that has dragged on for years.
Steve Verheul, the lead Canadian negotiator, said in August that the pharmaceutical demands are unlikely to be discussed during the negotiations in October. Instead, the issue will be bounced back to cabinet, with the government ultimately making the decision on whether it is prepared to cave to EU demands with the trade agreement hanging in the balance. The large pharmaceutical companies insist that the reforms will increase research and development investment in Canada, yet according to Michael Geist past experience suggests that is unlikely to happen.