Brussels, 01/03/2013 (Agence Europe) - An exemption on financial services sought in the free-trade agreement would prevent private investors or financial institutions from the EU directly taking the Canadian government to court.
According to national media, Canada is arguing for financial services to be exempt from its commitments in the comprehensive economic and trade agreement with the EU (CETA).
This is one of the main stumbling blocks in the talks, according to sources close to the Canadian negotiators. The exemption sought would prevent private investors and financial institutions from the EU directly being able to take legal action against Canada in suspected violations of its trade obligations. For example, according to the Canadian daily newspaper the National Post, if a bank from one of the EU countries considers that it has been unfairly treated by the Canadian government as a result of the legislation governing its financial sector, it would have to take the dispute to its national government which could then take up the matter with the Canadian government.
Canada benefits from similar derogations for the financial sector in the free trade agreement with North American countries (the US and Mexico), NAFTA.
According to the Canadian media, the EU has agreed to Canada's demand but the two sides have not managed to agree on the scope of the exemption sought. Canada would like a broad exemption, covering regulatory measures to protect the banks and financial system. A broad exemption would provide Canada with greater flexibility for a key sector in its economy. The EU would find it difficult to agree on a mechanism for resolving disputes acceptable to all parties.
European negotiators are calling for an exemption to include the tests included in the Investment Canada Act, which Canada currently uses for approving major foreign markets. US companies are not exempt from this as part of NAFTA.
The department of Canadian Trade Minister Ed Fast did not wish to comment on this dossier and would only say that progress had been made in several pending questions and that the different parties were determined to conclude the negotiations as soon as possible. (EH/transl.fl)