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Rein in meddling premiers

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As the provincial premiers gather for their meeting of the Council of the Federation in Ontario's Niagara-on-the-Lake, the topic of international trade is sure to emerge. In particular, the sputtering negotiations for a Canada-European Union Comprehensive Economic and Trade Agreement will certainly be a source of some concern.

These Canada-EU bargaining sessions have been going on now for years, and the final stages of the negotiations have proven to be especially difficult. Both sides have dug in their respective heels and thus seem unwilling to make the major compromises needed to push the deal across the finish line.

Part of the blame should be rightly placed on the shoulders of the Europeans. They have strung the Canadians along -- demanding significant concessions from Ottawa while offering precious little in return. Senior EU negotiators are quick to point the finger at the sometimes-unwieldy nature of the 28-country EU, but they are clearly seeking to minimize any economic costs to their membership. They have also sought to drag the negotiations out hoping to use both an impending deal with the Americans and the acknowledged political import attached to a Canada-EU deal by the Harper government to squeeze the Canadians for all they are worth.

A good portion of the blame, however, rests with provincial governments in Canada, which have added a critical element of uncertainty into the negotiations. To be sure, their presence has not made it any easier to conclude a trade pact with the Europeans.

The main problem with provincial involvement revolves around their input and behaviour at the actual Canada-EU bargaining table. Ever since the 1988 Canada-U.S. Free Trade pact, provincial governments have pressed for, and received, a larger voice in Ottawa's trade negotiations. While they were not in the actual negotiating room itself, they were next door at most of the bargaining sessions -- constantly pressing to be informed, consulted and placated.

The Canada-EU negotiations, with the acquiescence of the Harper Conservatives, have actually seen an enhancement in the role of the provinces in these discussions. Canadian negotiators, for instance, meet with them on the eve of every Canada-EU trade round and at the close of each negotiating session.

Provincial representatives, for the first time, are actually present whenever Canadian negotiators discuss "provincial tables" (areas involving provincial jurisdiction) with their EU counterparts.

Simply put, provinces have been able to formalize their role in global trade talks and thereby carve out a larger presence for themselves in the negotiations. And as we have seen with previous sets of trade negotiations (think the World Trade Organization trade rounds, NAFTA discussions around government procurement and softwood-lumber troubles with Washington), efforts by Ottawa to satisfy provincial demands (or where there were sharp differences of opinion over how to proceed) can needlessly complicate things, drag out the negotiations and lead to poor trade outcomes for Canada.

Provincial premiers, of course, do not want to make compromises for the good of cobbling together a larger trade deal, fearing it could have negative electoral implications for them. Atlantic provinces are worried about any increase in drug costs that would follow from any extension of pharmaceutical-patent protection for the Europeans; Quebec and Alberta are concerned about making concessions in the agricultural sector (specifically in dairy imports and beef exports) in the face of insufficient gains from the EU; and Ontario is loath to weaken its ability to use provincial subsidies and protectionist measures to benefit local manufacturers.

Additionally, the Europeans have been annoyed by the fact some provinces in Canada (namely, Quebec and Alberta) have strenuously objected to a federally directed national-securities regulator. These provinces successfully won a Supreme Court of Canada challenge in 2012, effectively killing the idea of a national regulator, by pointing to how such a scheme would interfere with the constitutional prerogatives of the provinces.

Ottawa policy-makers should also be cognizant of any provincial attempt to use the EU negotiations as a means of strengthening their constitutional competency in matters of international trade.

Indeed, the last thing that the federal government needs is for the provinces to extract a de facto veto over any future trade deals.

I'm not for a moment suggesting provinces should be completely outside the trade loop. That's just not on.

But Ottawa trade negotiators, in the final analysis, would be in a stronger bargaining position if provinces and premiers would simply step back from the entire process.

It would allow them to retain a common front, to speak authoritatively with a single, cohesive voice, to make the necessary compromises, and to better advance Canada's overall trade interests.


Peter McKenna is chair and professor of political science at the University of Prince Edward Island in Charlottetown.

Republished from the Winnipeg Free Press print edition July 23, 2013 A9

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