|Wikileaks:||View 03OTTAWA327 at Wikileaks.org|
|Tags:||ETRD CA WTRO|
|Redacted:||This cable was not redacted by Wikileaks.|
This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 OTTAWA 000327 SIPDIS GENEVA FOR USTR STATE FOR EB/TPP/BTA, EUR/ERA AND WHA/CAN DEPT PASS USTR FOR NOVELLI, MELLE AND BOMER-LAURITSEN USDOC FOR 4320/MAC/WH/ON/OIA/BENDER USDOC PASS ITC - JENNINGS Treasury for OASIA/IMI - Mathieu E.O. 12958: N/A TAGS: ETRD, CA, WTRO SUBJECT: EU-CANADA TRADE AND INVESTMENT "ENHANCEMENT" REF: BRUSSELS 00165 1. (U) THIS MESSAGE IS SENSITIVE, BUT UNCLASSIFIED. PLEASE TREAT ACCORDINGLY. 2. (U) Reftel reported Brussels perspectives on plans for an EU-Canada "Trade and Investment Enhancement Agreement," which were announced at the December 19 2002 EU-Canada Summit in Ottawa. Embassy Ottawa ECON staff visited counterparts at the Delegation of the European Commission in Ottawa on January 28 to obtain their views of this announcement. 3. (SBU) EC Delegation staff confirmed reftel's perception that the EU is not enthusiastic about this initiative, and they were forthcoming in explaining their position. They emphasized that their top concern is to avoid diverting resources from the Doha round of multilateral trade negotiations. Another important concern is not to send any signal to WTO members which might be misunderstood as implying that the EU lacks confidence that the Doha Round will reach a successful conclusion and deliver desired results, particularly on market access. 4. (SBU) Following is a summary of key points made by Delegation staff: -- (SBU) GOC representatives have been very persistent in pushing for a Canada-EU free trade agreement. This continues a lengthy GOC history of (sporadic and unsuccessful) efforts to diversify Canada's economic relations away from the United States (which now receives over 85 percent of Canada's merchandise exports). -- (SBU) Over the past year, GOC demands for an FTA with the EU gained urgency, presumably due to outgoing Prime Minister Jean Chretien's well-known desire to leave a policy "legacy." -- (SBU) The European Commission did not see an economic/commercial case for a full-fledged FTA, and did not want to risk detracting from multilateral negotiations. GOC trade policy experts (including International Trade Minister Pierre Pettigrew) sympathized with this position, but other factions in the GOC pushed very hard for FTA negotiations. -- (SBU) There was some difference of opinion regarding the value of a FTA among EU member states, and especially among a few resident missions who have been lobbied by the GOC. The EU Trade Policy Body, however, remained unified in their position against a FTA. -- (SBU) If immediate FTA negotiations were not attainable, the GOC wanted an announcement prior to Chretien's retirement that Canada and the EU would negotiate an FTA following the conclusion of the Doha Round. The EU also said no to this option, not only on the grounds cited above, but also because it was considered a mistake to "stockpile" trade policy commitments for the post-Doha era. -- (SBU) On the eve of the December 19 bilateral summit, Minister Pettigrew and EU Trade Commissioner Pascal Lamy (who the EC delegation describe as having a superb relationship) struck a compromise: negotiations will begin as soon as possible (probably in 2004), but will not aim for an FTA - rather, for a "Trade and Investment Enhancement Agreement." -- (SBU) The FTA-TIEA distinction is meaningful, indicating that TIEA negotiations will not/not address "core trade issues" on the table in Geneva - specifically, it will not address market access for either agricultural or non- agricultural goods. Areas which a TIEA could address include trade and environment issues, government procurement (in which the EU seeks better access to Canadian markets at all levels), and regulatory cooperation. There are likely to be parallels with recent EU-US liberalization efforts. -- (SBU) The GOC has already conducted a tariff study and a telephone business survey; the EU has done a more extensive business survey. -- (SBU) The likely timeline is for the trade ministers to present leaders with an "architecture" for the TIEA at the December 2003 summit, with leaders then mandating negotiations to begin in 2004. CELLUCCI
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