GHY Tradelines

(Ethan Bilby – Reuters)

The European Union wants to exempt state control of utilities and support for creative industries from free trade talks with the United States due to start next month, the latest draft of Brussels’ negotiating mandate showed on Tuesday.

The draft outlines several exceptions that preserve EU states’ control over sensitive sectors, including the power and water industries and government controlled infrastructure and are likely to be the main areas it seeks to cordon off from negotiations.

Senior officials including EU trade chief Karel De Gucht and British Prime Minister David Cameron have called for the bloc to come to the table with a completely open mind and officials say it is unlikely further substantial exemptions will be added. Read more here.
 

(Government of Canada)

IMPORTANT NOTICE TO SUPPLIERS:

Government of Canada is moving its Government Electronic Tendering Service from MERX to Buyandsell.gc.ca/tenders on June 1, 2013.

Starting June 1, 2013, federal government tenders (tender notices and bid solicitation documents) will be published and available free of charge on a Government of Canada Web site on Buyandsell.gc.ca/tenders.

The Government Electronic Tendering Service on Buyandsell.gc.ca/tenders will be the sole authoritative source for Government of Canada tenders that are subject to trade agreements or subject to departmental policies that require public advertising of tenders.
 

(Bridges Weekly)

Canada has appealed a recent WTO dispute panel finding that local content requirements for renewable energy generation in the province of Ontario violate international trade rules. Despite the favourable outcome, the EU and Japan – who had tabled the WTO challenge (DS426 and DS412, respectively) – responded last week with cross-appeals of their own, aimed at other aspects of the panel report with which they disagree.

The province’s feed-in tariff (FIT) scheme aims to support renewable energy by guaranteeing electricity generators above-market rates on certain renewable sources of energy, such as wind and solar. The global trade arbiter on 19 December announced that the local content requirement of the scheme – obliging participants to source up to 60 percent of their equipment from Ontario – was a trade barrier that discriminated against foreign companies. Read more here.
 

(Michael Den Tandt – Postmedia News)

It’s an idea that stubbornly refuses to go away, despite its being a poor ideological fit with the Harper Conservatives’ downsizing bent, and a hobbyhorse of some of their fiercest critics: A new federal agency, the sole purpose of which would be to procure ships, planes, trucks, and all the other extraordinarily expensive and frequently controversial gear required by a modern military.

Within days, according to Ottawa insiders, the federal cabinet will be asked by Public Works Minister Rona Ambrose to consider a discussion paper, authored by senior bureaucrats in her department, that examines two core avenues for managing Canada’s pending military hardware purchases. Read more here.
 

(Joe Brock – Reuters)

Free trade talks between Canada and the European Union are progressing but there is no end date for a deal that was supposed to have been finished by the end of 2012, Canada’s Trade Minister Ed Fast said on Monday.

Canada, keen to diversify its exports away from the United States, says a deal with the European Union would increase two-way trade by 20%. The talks started in 2009.

Officials and industry sources say several sensitive matters remain to be settled, including access for agricultural goods, opening up procurement markets and the extension of pharmaceutical patents. Read more here.
 

(Embassy – Sneh Duggal)

Plans are in the works for Canadian ministers and European Union Trade Commissioner Karel De Gucht to meet in November to talk about the Canada-EU trade deal, as negotiations near a close.

Observers have suggested that the possible meeting would take place in Brussels. An EU Delegation official, however, noted that nothing is set in stone and much will depend on the outcome of ongoing meetings between the two sides.

Canadian and European negotiators are set to finish up another set of face-to-face meetings by Oct. 26, and observers say the two sides are down to the “final stretch” of hammering out a trade deal. This week’s meetings are a continuation from talks that started on Oct. 15 in Brussels.

Federal negotiators along with provincial and territorial officials flew there for what the Canadian government is calling “focused sessions on the remaining issues,” which have been happening regularly since the two sides completed nine formal rounds of talks in October 2011.

Observers say these outstanding issues include intellectual property rights, government procurement, investment and services, and agriculture. Read more here.
 

(Barrie McKenna — The Canadian Press)

A long purchasing drought by cash-strapped U.S. state and local governments is easing as tax revenues bounce back from the deep recession.

Among the beneficiaries are Canadian transit equipment makers, such as Winnipeg bus manufacturer New Flyer Industries Inc. and train manufacturer Bombardier Inc., which both report improving U.S. prospects. [...]

New Flyer, which sells three-quarters of its buses in the U.S., is working on bids for nearly three times as many buses as it was at this time last year – 7,000 versus 2,500.

“We’ve definitely seen a pickup in the amount of bid activity the marketplace,” said Glenn Asham, New Flyer’s chief financial officer. Read more here.
 

(Globe & Mail)

The Conservative government and the Michigan governor’s office have secured a deal to build a second bridge between Windsor and Detroit – a historic accord aimed at unclogging North America’s most important trade artery after decades of setbacks. [...]

The agreement requires Canada and the United States to compromise on a hot-button subject: the rules stipulating where the material to build the bridge and associated U.S. infrastructure must come from. Canada would have preferred a no-restrictions approach to steel and other materials, while Michigan had favoured a “buy American” rule.

The tradeoff is that all iron and steel for any component of the bridge, or the approaches and customs plaza on the U.S. side, must originate from Canada or the United States. The measure is an attempt to reassure Michiganders who were warned by bridge opponents that the steel might come from cheaper overseas suppliers in China or South Korea. Read more here.
 

(Bridges Trade)

The degree to which countries can help support their burgeoning renewable energy sectors was again the subject of debate at the WTO this week, with Canada defending itself at a second dispute settlement hearing. Japan and the EU have brought two separate cases – DS412 and DS426, which are being heard together – against Canada over local content requirements in the province of Ontario’s feed-in tariff scheme.

Positions by the parties have not deviated significantly since the panel’s first hearing in March (see Bridges Trade BioRes, 28 March 2012). The opposing sides remain focused on whether the feed-in tariff scheme should be considered legitimate government procurement or an illegal subsidy. Oral statements, delivered on 15 May, delved into the details of the two positions, with each party expressing concern that arguments had not been advanced further.

There are two central questions that the panel is looking at to determine whether the scheme should be considered government procurement – and thus justified under WTO law. First, is the Ontario Power Authority (OPA) actually purchasing a good when it acquires energy from wind farms involved in the FIT scheme, or does it operate more as a fund or price support? Second, what criteria or benchmarks should be used to determine whether the purchase price by the OPA is above market value and thus confers a benefit? Read more here.
 

(Livio Di Matteo – Winnipeg Free Press)

Canada is negotiating the Comprehensive Economic and Trade Agreement with the European Union. The recent stirrings of public debate over what the CETA might mean for municipal public procurement in Canada, or drug prices, brings back memories of the Canada-U.S. Free Trade Agreement of the 1980s. [...]

Will the CETA have an impact on Canada’s economy? The answer is yes, but the effects should be largely positive. One can expect that, like the FTA, there will be economic adjustment that generates winners and losers, but that over the long term, there will be economic growth and employment generated from diversifying our trade. Moreover, reducing our dependence on the U.S. market will actually create greater economic stability for our economy. Read more here.
 

(David P. Ball – Vancouver Observer)

In a landmark decision for BC communities, Victoria City Council voted unanimously on May 10 to be excluded from what international trade minister Ed Fast touts as “the most ambitious trade deal” in history.

Victoria passed a motion to opt out of the Comprehensive Economic and Trade Agreement (CETA), currently in final-stage secret negotiations with Europe, only weeks after federal cabinet ministers were deployed across Canada to promote it. [...]

The city’s decision joins motions in nearly 60 municipalities across Canada, including opt-out votes in Toronto, Montreal and Hamilton, warning that CETA risks banning municipalities from enacting buy-local or hire-local policies, and potentially impinges on city contracts such as water services. Read more here.
 

(Electronics Feed)

Stringent new counterfeit-part regulations contained in the 2012 U.S. National Defense Authorization Act (NDAA) may have broad international implications, impacting hundreds of overseas companies that have supplied billions of dollars’ worth of items to the American government.

Non-U.S.-based suppliers accounted for more than $2 billion during the five-year period from 2007 to 2011, with European Union (EU) and Middle Eastern companies accounting for the bulk of the American government’s procurement spend, according to information and analytics provider IHS (NYSE: IHS).

“There’s a perception that U.S. regulations such as 2012 NDAA, Section. 818. Detection and Avoidance of Counterfeit Electronic Parts,is only an issue for American companies, and that they don’t impact firms in Europe, the Mideast and elsewhere,” said Greg Jaknunas, senior product manager, supply chain solutions, at IHS. “However, the impact is beginning to be felt worldwide, as many international companies and global manufacturing facilities can directly participate in the defense supply chain and begin to see customer requests for counterfeit detection and avoidance measures that are flowed down through the supply chain.” Read more here.
 

(Bloomberg – Jim Brunsden)

The European Commission will present proposals tomorrow that would empower the region’s authorities to ban companies from outside the EU from bidding for public procurement contracts in Europe.

The powers, part of plans to boost the 27-nation bloc’s arsenal against trade discrimination, could be used if other countries don’t grant equivalent market access to European businesses, Olivier Bailly, a spokesman for the regulator, said today in Brussels. Read more here.
 

(Bloomberg – Jim Brunsden)

The European Union’s executive will seek the power to block companies based outside the EU from bidding for public procurement contracts in Europe as part of plans to boost the bloc’s arsenal against trade discrimination.

The EU’s top financial-services and trade officials plan to propose next month that the European Commission in Brussels should have the power to ban companies from winning public procurement contracts in the region if they are based in countries that “repeatedly discriminate” against European firms, Chantal Hughes, a spokesperson for the commission, said today in an e-mail. Read more here.
 

(John Heilprin — The AP)

The United States, the European Union, Japan and other countries have agreed after 14 years of talks to give foreign companies greater ability to compete for each others’ government procurement contracts, officials said Thursday.

The World Trade Organization estimates that the agreement could add between $80 billion and $100 billion to global trade each year. Government supply contracts typically come to about 15 to 20% of a nation’s gross domestic product.

Officials said the pact was reached after the 27-nation EU and Japan ironed out remaining differences early Thursday. As part of the 42-nation deal, Japan will allow foreign firms to bid for contracts to rebuild areas hit by this year’s tsunami. Read more here.
 

(Bridges Weekly)

Forty-two countries are close to finalising a deal that would liberalise access to billions of dollars worth of public procurement contracts, the chair of the WTO committee on government procurement said yesterday. Delegations are being urged to finish negotiations by the global trade body’s December ministerial.

Senior Swiss trade diplomat Nicholas Niggli, who chairs the committee, stressed to delegates at the end of the 17-18 October informal committee meeting that participating countries should aim to conclude the talks by the WTO’s December gathering. He cautioned that, should members fail to meet the deadline, the talks could “crumble” entirely.

A Geneva-based trade official told Bridges that, while not guaranteed, the “prospects [for finishing by December] are very good.”

With the global trade body’s Doha Round of trade talks struggling to make headway, the pressure is on to achieve concrete outcomes in other areas – including, potentially, a finalised version of the new Government Procurement Agreement (GPA) at the December WTO gathering. The GPA aims to tackle cronyism and corruption in government contracts. The agreement commits members to certain core disciplines regarding transparency, competition, and good governance, covering the procurement of goods, services, and capital infrastructure by public authorities. Read more here.
 

(Embassy – Anca Gurzu)

Expect progress on services, labour mobility, procurement; but challenges remain on IP, investment

On Oct. 6, after asking to appear in front of a parliamentary committee, Trade Minister Ed Fast boasted about the benefits and the preferential market access Canadians would have from a trade agreement with the European Union.

Mr. Fast’s appearance before the House trade committee came just a week and a half ahead of the ninth – and, as some predict, potentially last – round of formal talks on the Comprehensive Economic and Trade Agreement in Ottawa starting Oct. 17.

But while emphasizing the strong political momentum behind completing a deal that would be larger in scope than the North American Free Trade Agreement, Mr. Fast also cautioned that the government would only sign a pact that is in the best interest of Canadians.

“Canadian products, services and commercial expertise are for sale,” he said. “Our government’s powers and ability to regulate are not.”

The minister’s remarks highlight to a large extent existing tensions, among groups in both Canada and the EU, over a number of issues the deal has caused to surface – many of which are expected to be on the table in the ninth round. Read more here.
 

(Embassy – Anca Gurzu)

Five Canadian provinces are entering the election campaign mode just as trade negotiators are working on tackling sensitive issues falling under their jurisdiction ahead of the next round of the Canada-EU trade talks in October.

Some observers say the timing of these elections will create some delays for the completion of the deal, but this won’t affect its final substance. Others, however, worry that making major provincial commitments during a time of political change is not wise.

Furthermore, some say a Progressive Conservative win in Ontario – a key market province for the Europeans – might affect the final procurement deal.

Negotiations for the Canada-EU Comprehensive Economic and Trade Agreement entered the tricky bartering stage after officials exchanged offers on goods and procurement towards the end of the eight round of talks in Brussels, Belgium in July.

Since then, negotiators on both sides of the Atlantic have been assessing the merits of those offers, while also planning to exchange offers on services and investment in the weeks before the next – and potentially last – round of talks in Ottawa from Oct. 17 to 21.
 

(Minister for International Trade)

The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today issued the following statement on U.S. President Obama’s recent legislative proposals – the American Jobs Act:

“On September 8, 2011, U.S. President Obama outlined his proposals for the American Jobs Act.

“The U.S. Administration has just released details of the American Jobs Act. The Administration is proposing the inclusion of Buy American provisions as a part of the infrastructure funding proposal.

“Our government is committed to delivering free trade leadership and Canadians can count on our government to defend free and open trade on the world stage.

“In this fragile economic recovery, we know history has shown protectionist measures stall growth and kill jobs.

“I have instructed Canadian officials to initiate the consultation process that was established as part of the 2010 Canada-U.S. Agreement on Government Procurement.

“Our government will raise with the Obama Administration and Congress concerns regarding measures that impede access for Canadian workers and businesses to the U.S. market, as we did for earlier U.S. stimulus programs.”
 

(Embassy – Carl Meyer)

The provinces and territories have never been able to unite on such a policy until now, say analysts, for a host of reasons

For the first time, the provinces and territories have agreed to sign on to a policy that seeks a framework with the federal government codifying their involvement in international trade talks.

The Council of the Federation released its provincial trade strategy, Canada in the Global Economy, two weeks ago during its annual meeting, with much of the press coverage focused on the federation’s planned joint trade mission to Asia.

But analysts say just as important is the fact that the provinces are now ready to negotiate a deal with the federal government that would establish in writing how provincial and federal officials interact during trade deals.

“Premiers have committed to develop a framework agreement with the federal government concerning the role of provinces and territories in the negotiation of international trade agreements that concern matters under their jurisdiction,” reads the document. Read more here.