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<CETA’s success rides on Regulatory Cooperation, and the government has to make it happen

CETA is a historic event, a chance for Canada to enhance its prosperity and security via economic convergence with a great trading power with shared political values. Recent events bring home just how urgent and existential this is.

CETA is the most ambitious treaty the EU has ever signed, and nothing the EU is currently negotiating comes near it. The reason is eminently political. When Donald Tusk, President of the European Council, said that Canada is the most European country outside of Europe, he wasn't just being courteous, he was underscoring why the Europeans accepted to go so far - because they see in Canada a solid and sophisticated democracy with the same default concern for social justice.

CETA is often referred to as a 'Second Generation' treaty, taking trade relations to a new level. That needs closer analysis.

The progress on tariffs is impressive, but it's incremental, not a sea change. Closer to 'Second Generation' are public procurement tendering, rights of establishment for businesses, the greater freedom of movement for company employees and the imaginative initiative on mutual recognition of qualifications engineered by the professions themselves.

All this is good, but not a sea change, not enough to bring about the quantum leap in trade volumes needed for true diversification of the Canadian export economy. Zero tariffs and freer circulation of employees and professionals only reach full potential when trade flows are in full swing. In the meantime, there's even something perverse and misleading about the 'good' figures for ever-increasing Canadian investment in the Union. In fact, Canadian manufacturing companies set themselves up in Europe and become 'internal' EU manufacturers because it's the only way to get beyond the mother of all trade obstacles: non-tariff barriers. Real prosperity for Canadians doesn't mean Canadian companies setting up a manufacturing base in the EU, it means being part of an EU-Canada economy so integrated that Canadians export from home.

Breaking down non-tariff barriers is the purpose of the cutting edge CETA 'Regulatory Cooperation' provisions. Without them, CETA will bring solid trade progress, but nothing special. It should be the highest political priority to make Regulatory Cooperation work.

It won't be easy. Here, in my view, are some of the markers:

To ensure this doesn't all go South, it's important to get a handle on what exactly Regulatory Cooperation is. It is not harmonisation of Canadian and EU law, nor could it ever be. Harmonisation of national law is what the EU does internally, because it's a quasi-country with a federal civil service and a legislature consisting of 28 democratically elected national governments and a directly elected European Parliament, capped by a federal Court which has given EU law direct effect in the member states and primacy over national law. You need all that to make harmonisation of national law work, and CETA has none of it.

CETA Regulatory Cooperation is predicated on a different hypothesis: the free flow of trade between Canada and the EU is impeded by any number of product safety or phytosanitary or environmental protection divergences between Canadian and EU regulation. But these divergences were not designed to keep Canadians out; they just happened because of different Canadian and European approaches to consumer or environmental protection - different ways of achieving the same result for two societies having equivalent social and environmental imperatives. The purpose of Regulatory Cooperation is to identify the root causes of these divergences - different impact assessment methodology, different control procedures, different scientific conclusions - and, by developing a common approach to these regulatory foundations, achieve the objective conditions for more similar regulation in the future, freeing up trade.

There is no more honourable endeavour, but it needs to be seen for what it is and nothing more, not back door, backroom harmonisation of regulation.

The secret to success is what has so sorely lacked in the CETA negotiations and almost brought the whole Treaty down: transparency.

CETA provides a Regulatory Cooperation Forum (RCF) for regulators and brings 'interested parties' into the dialogue: unions, business interests, NGOs. How this is to be done and with what degree of transparency is yet to be decided. The parties need to get it right, right now.

Yet there are all sorts of ways this can go wrong.

It's unlikely the Canadian government and European Commission will get caught in the act of over-reaching backroom regulatory dealing. More likely they'll choke on their fear of being perceived that way, and scale back their cooperation accordingly. They know that Regulatory Cooperation was a target of CETA opponents, with trade unions and NGOs thinking they'd be outgunned by business lobbies with better entrée. And they may blink at the prospect of light shining in; the European Commission in particular has no culture of discussing its impact assessments or other pre-regulatory procedures even with Europeans, much less with foreigners.

The solution is simple. Complete transparency of the meetings and exchanges of the RCF and its offshoots and of their exchanges with 'interested parties', including sustained liaison with the European Parliament and with Canadian federal and provincial parliaments, from day one. The very first agenda item for the RCF should be to organise transparency and wide-as-possible dialogue.

Ottawa must take the initiative. The EU Trade Commissioner fortunately hails from Sweden, a country where open government is the state religion, but she is unlikely to overcome the inbred opacity of the Commission administration unless there's a big Canadian offensive. Regulatory Cooperation is the key to getting CETA into orbit and the government just has to push until it's done.

Michael MacBrien is a founding partner of MacBrien Cuper Isnard European Affairs