Some ideas on how the region can get the best out of the deal.

The Canada-European Union trade agreement known as CETA (Comprehensive Economic and Trade Agreement) sits in limbo, with Belgium stating it could not sign on with one of its regions (Wallonia) opposing the deal due to concerns about CETA’s impact on local agriculture, environmental standards, and investment settlement. There remains hope the holdouts may still be brought onside, perhaps through some “interpretive declarations” that would attach to the deal. Re-negotiating any parts of the deal has been ruled out both by Canada and EU officials.

If CETA does move forward, the question for Canada and Canadians is how to get the best out of the deal. This is important for smaller “have not” regions like Atlantic Canada.  There are some concrete ways that policy-makers and businesses in the Atlantic Provinces might make the best of CETA, assuming it’s fully ratified.

The first suggestion is the most obvious – for industries in Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador, to immediately begin building trade capacity in order to take advantage of a central benefit provided by CETA: tariff reduction and improved access to European markets. This requires coordination between the public and private sector, including government working with business to develop trade strategies, incentivize production capacity and build and expand trade-related infrastructure, from roads and bridges to port upgrades and telecommunications.

Though these changes touch a range of sectors relevant to Atlantic Canada, two export sectors that will particularly benefit (and in which all four provinces do business) are the metals and mineral products exports sector, and the fishing and fish products sector.  For example, Nova Scotia’s fish and fish product exports to the European Union (EU) were worth an “an average of $147.5 million annually between 2011 and 2013″ and thus the “largest source of Nova Scotia’s exports to the EU”. And Newfoundland and Labrador, which exported over $2 billion in metal and mineral products to the EU between 2011 and 2013, would benefit from CETA eliminating European tariffs of up to 9% on such metal products.

All provinces should increase production/export capacity to take advantage of these new market conditions. Sounds easy, but the work and capacity building must be well-planned, strategic, with provincial governments assisting where they can.

Beyond that obvious suggestion, there are other CETA provisions Atlantic Canada should also capitalize on, though these ideas are far less conventional. As such, you won’t find them in the Government of Canada’s official reports on CETA’s “benefits” for any of the Atlantic Provinces. But there are opportunities here nevertheless.

So, a second suggestion – Atlantic Canadian businesses should take advantage of CETA’s expansion of “geographical indications.” A geographical indication (GI) is a “sign” used on goods with a specific geographical origin with special qualities or reputation tied to that origin. A GI offers a special marketing advantage for that product as it identifies the good or product with that place of origin (thus also signifying the good or product possess the qualities, characteristics, or reputation associated with that place of origin).  A classic example of a GI is “Scotch Whisky”, which indicates a whisky’s origins in Scotland, and thus all the special qualities and characteristics consumers identify with Scotch (and the processes used to produce it). GI protections are like a parallel intellectual property protection regime (similar to trademarks), as they prevent competing producers (not producing in the protected place of origin) from using the GI terms to market their product. Thus, there are no “Scotch Whiskies” produced and marketed by Canadian distilleries.

CETA will require Canada to provide protection for over 179 new GI terms covering a broad range of products, mostly dairy, meat, and beer.  This is a significant expansion as Canada had previously only recognized GIs for a small number of foreign wines and spirits (like Scotch).

GIs are seen as a big concession by Canada to Europe under CETA, because there are so many established European products associated with particular regions or places that signify characteristics or qualities – think Roquefort cheese (region in France) or Gouda cheese (Holland). These give European producers a significant advantage as these new CETA protections would prevent Canadian producers from using these terms to market their own products (no more Canadian cheese referred to as “Gouda”).

It may be true that European producers have a head start; but it’s time that producers in Canada, particularly the Atlantic provinces, start thinking strategically about how to take advantage of GIs to promote our regional products.  Some ideas?  Nova Lox might be requested for protection as a GI for Nova Scotia-produced smoked salmon (or Nova Scotia Lobster too!).  Screech might be registered as a GI for Newfoundland distilled rum. Halifax donairs could be another. For elsewhere in Canada? Montreal bagels, Nanaimo bars, Alberta beef, and Oka cheese (from Oka, Quebec) could all be potential GIs under CETA’s broad protections, giving Canadian (and Atlantic Canadian products) a benefit when they are marketed in Europe.

Right now, Annex I to CETA includes 170+ GI terms that Canada must protect, but there are absolutely no GIs presently listed in Annex I for Canadian products that European countries must respect. That needs to change.

Third, CETA offers infrastructure advantages for Atlantic Canada’s growing information-communication technology (ICT) and ocean technology sector. These are sectors provincial and federal governments are actively cultivatingand promoting, and the recent announcement of an $220 million Ocean Frontier Institute project, to be based at Dalhousie University in Halifax, is part of that growth and investment.

CETA not only reduces European tariffs on ICT products, but it would also allow Canadian technology firms to compete for ICT-related procurement contracts in Europe. CETA also includes commitments that would ensure that telecommunications companies would not be able to use discriminatory practices (ie. bandwidth throttling) against Canadian firms who use the European networks and infrastructure to deliver products and services. These are all opportunities for small, nimble, and innovative Atlantic Canadian to build an international customer base.

Finally, even though CETA is no longer being negotiated, Atlantic Canada’s lobbying, negotiating, and participation is not over.  CETA’s application, facilitation, and minor modifications (like adding new GI terms added to Annex I) will be governed by a broader CETA trade committee and a range of subcommittees dealing with different categories under the treaty. Provincial officials have the opportunity, as part of Canadian delegations dealing with CETA matters, to work with and influence these committees.

CETA is not yet ratified, but strategic thinking and planning needs to begin to ensure Atlantic Canada gets the best out of the deal.

Photo: Verena Matthew / Shutterstock.com

 


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