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Sophie Schram

Constructing Trade, page 1 - 22

The Negotiation of the Comprehensive Economic and Trade Agreement (CETA) in Quebec

1. Edition 2019, ISBN print: 978-3-8487-4954-6, ISBN online: 978-3-8452-9166-6, https://doi.org/10.5771/9783845291666-1

Series: Denkart Europa | Mindset Europe, vol. 30

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Denkart Europa | Mindset Europe | 30 Constructing Trade Sophie Schram The Negotiation of the Comprehensive Economic and Trade Agreement (CETA) in Quebec Denkart Europa | Mindset Europe Denkart Europa|Mindset Europe presents international academic analyses and contributions on a broad range of Europe-related subjects. The book series addresses the general public worldwide and contributes to the reflection on political and societal developments in Europe. With Denkart Europa|Mindset Europe, the foundation ASKO EUROPA-STIFTUNG and Europäische Akademie Otzenhausen present the outcomes of their versatile activities. Its monographies, anthologies, essays and handbooks invite to a continuous interdisciplinary discourse on Europe. edited by ASKO EUROPA-STIFTUNG, Saarbrücken and Europäische Akademie Otzenhausen. BUT_Schram_4954-6.indd 2 21.11.19 15:45 The Negotiation of the Comprehensive Economic and Trade Agreement (CETA) in Quebec Constructing Trade Nomos Sophie Schram BUT_Schram_4954-6.indd 3 21.11.19 15:45 The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available on the Internet at http://dnb.d-nb.de a.t.: Trier, Univ., Diss., 2017 ISBN 978-3-8487-4954-6 (Print) 978-3-8452-9166-6 (ePDF) British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library. ISBN 978-3-8487-4954-6 (Print) 978-3-8452-9166-6 (ePDF) Library of Congress Cataloging-in-Publication Data Schram, Sophie Constructing Trade The Negotiation of the Comprehensive Economic and Trade Agreement (CETA) in Quebec Sophie Schram 348 pp. Includes bibliographic references and index. ISBN 978-3-8487-4954-6 (Print) 978-3-8452-9166-6 (ePDF) 1st Edition 2019 © Nomos Verlagsgesellschaft, Baden-Baden, Germany 2019. Printed and bound in Germany. This work is subject to copyright. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. Under § 54 of the German Copyright Law where copies are made for other than private use a fee is payable to “Verwertungs gesellschaft Wort”, Munich. No responsibility for loss caused to any individual or organization acting on or refraining from action as a result of the material in this publication can be accepted by Nomos or the author. With the support of the German Research Foundation and ASKO-Europa-Stiftung. BUT_Schram_4954-6.indd 4 21.11.19 15:45 Preface When I started the research for this doctoral thesis in late 2013, the negotiation of the Comprehensive Economic and Trade Agreement between the EU and Canada was moving forward quickly. On both sides of the Atlantic, CETA was depicted as a prototype or a blueprint for a series of so-called new-generation trade agreements, which were more comprehensive in nature than previous agreements and included, for example, chapters on foreign direct investment protection, government procurement, regulatory standards and geographical indications on food labels. The EU had already concluded a similar agreement with South Korea and negotiations were underway, among others, with Singapore and the US. When travelling to Canada and especially to Quebec for field research in late 2013, I found that international trade and economic integration were central political topics in Canada and in Quebec. In the EU, international trade was not among the most salient political topics then, at the time when I first travelled to Canada. Although there had been moments of strong political contestation and opposition to further trade liberalisation – especially in France – trade policy seldom reached a similar level of political relevance as it did in Canada and the Canadian provinces. In the 1980s, Canadian federal elections were fought over North American economic integration. Political parties in Quebec made trade and economic integration a key topic of their political programmes and closely connected them to their provincial development policies. In the EU, trade policy was considered to a large extent an a-political topic, left mostly to the expertise of the bureaucrats of the European Commission. Even though the member states need to implement trade agreements in accordance with their respective internal procedures, national parliaments' involvement in the negotiation processes has mostly been fairly limited. This was to a large extent because of a general consensus on the benefits of free trade. Furthermore, governmental levels below the member states were rarely involved in trade discussions. In Canada, to the contrary, the different provinces and even the larger cities have firm positions on Canada's international trade relations, considering them to have profound implications on their local development. Even though the federal government has sole jurisdiction over Canada's international trade agreements, the provinces develop their own positions and try to influence 5 federal policy-making my various means, about which I will say more in the course of this book. By now, the picture in the EU and worldwide has become an entirely different one: international trade has moved center-stage of the political agendas in several European states and civil society involvement has increased. A trigger of the politicisation of trade in the European Union was the negotiation of the Transatlantic Trade and Investment Partnership (TTIP) with the US. Since mid-2014, civil society opposition to this agreement has been growing across European member states – including in Germany, where internal trade is a backbone of the (export-oriented) economy. At the same time, sub-federal actors in the EU have become more vocal. They actively monitor the impacts of international trade agreements on the economic development of their region and, sometimes, even threaten national governments to withdraw their support. On an international scale, especially with the election of US president Donald Trump, the long-standing consensus among Western political elites, that more openness to trade eventually leads to more wealth, has lost ground. The benefits and drawbacks of new trade deals are now more explicitly measured against the yardstick of expected impacts on the respective national economic spaces. For example, especially the US has recently instrumentalized tariffs to protect domestic industrial sectors or retaliate unilaterally against perceived unfair public policies. International trade has become one of the most salient topics of international relations by now, and an almost-forgotten vocabulary in trade comprising terms such as protectionism, national economic development, and unilateral retaliation has quickly re-gained ground in the international political discourse. By looking at the Quebec and Canadian cases where political debates on trade and nationalism are closely inter-twined, I better understood recent developments in the EU and on the international scene. The analysis of the discourse on the Comprehensive Economic and Trade Agreement (CETA) and the historical discourses underpinning it helped me – and I trust the readers of this book – to find answers to why and how the long-standing consensus on the benefits of free trade slowly began to crumble in the EU as well. This research would not have been possible without generous support. I first wish to thank the International Research Training Group Diversity and the Deutsche Forschungsgemeinschaft for generous support -financial and intellectual- without which extended research stays in Canada and the EU would not have been imaginable. Apart from a generous scholarship, the Training Group's members – especially Ursula Lehmkuhl and Lutz Preface 6 Schowalter – also provided invaluable support in mastering the intricacies and administrative hurdles associated with crossing national borders. I also thank my colleagues in the Training Group who made doctoral research not only stimulating intellectually, but also very enjoyable. Especially, I thank Sarah Pröwrock, Xymena Wieczorek, Jeri Rahab, Dave Poitras, Kaisa Vuoristo and Ahmed Hamila for friendship and controversial discussions. I also thank the Europäische Akademie in Otzenhausen and the Asko-Europa-Stiftung for many conferencing and teaching opportunities. I thank the editors for generous financial and marketing support for this book. I hope that my contribution to their series Denkart Europa triggers a new perspective on the EU's international trade relations. I am deeply indebted to my interview partners for their time and insights. My interviewees let me glimpse behind the (too often) closed doors of trade policy-making. Especially, I wish to thank Pierre-Marc Johnson, Quebec's chief negotiator, and Jean Charest, Prime minister in Quebec for most of the time when CETA was negotiated, for sharing their insights and establishing contact with several members of Quebec's government. At the same time, I am deeply grateful to the many researchers who helped me understand Quebec and Canadian politics, especially Frédéric Mérand at the Université de Montréal's Cérium, and Jörg Broschek and Patricia Goff at Wilfrid Laurier University. Foremost, I thank my supervisor Prof. Joachim Schild for accepting to supervise, in a political science department, a topic so heavily inspired by cultural studies and sociology. In this vein, I thank him for bringing my floating ideas into a more organised form and shape, as well as for his high availability and professionalism. This piece of research would not have been possible without the open doors and spirit at Jane Jenson's chair at the Université de Montréal. Her generosity and intellectual curiosity allowed me to learn and grow. She continues to be a true role model and thought leader for many young women including myself. I give love and thanks to my family for 'being there', for their liberal thinking, for letting me grow up without boundaries and for providing the so-much needed home-base for someone moving their home so often. Especially, I am deeply grateful to my spouse Dominik Groß, my best friend, for his love. Preface 7 Table of Contents List of Figures 15 List of Tables 17 List of Abbreviations 21 Introduction 23 Theoretical, Conceptual and Methodological Considerations Chapter 1: 29 Changing Perspectives on Theorising Trade Policy: From the Attribution to the Subjective Development of Interests Section 1: 30 Trade as a Function of Attributed Interests and Ideas 1. 31 The Problematic Status of Attributed Interests2. 35 Overcoming the Great Divide: From Fixed Preferences to the Strategic Development of Interests 3. 37 Analysing Trade Positions as a Discursive Strategy: A Conceptual Framework Section 2: 42 Object of Research: Trade Positions as a Discursive Process 1. 42 Trade Negotiations as a Policy Process2. 43 Repertoires, Frames and Strategies: Developing Trade Interests 3. 46 Repertoires: Connecting Interests to Collective Representations a) 46 Discursive and Coalitional Strategiesb) 51 Examining Political Positions on TradeSection 3: 53 Disaggregating Trade Negotiations: Four Case Studies in Quebec 1. 53 Constructing the Cases: Four Discursive Processes a) 53 9 Focussing on Actors, not Structures: Selection Criteria for the Units of Analysis b) 58 Trade Policy Strategy as Discursive Data: Constructing the Corpus 2. 59 Looking for Patterns in Political Discourse: The Method of Analysis 3. 63 Exploring and Describinga) 64 Data Reduction Through Codingb) 64 Looking for Patternsc) 67 Conclusion 68 Setting the Agenda―a Discursive Strategy to Launch CETA Chapter 2: 70 ‘Un nouvel espace économique’: Constructing an Interest to Launch a New Economic Agreement between Canada and the EU Section 1: 72 Failing to Reach a Comprehensive Economic Agreement 1. 72 Reviving the Project of an Economic Partnership: A New Space for Economic Development 2. 75 A Discursive Strategy for Province-Building and Strengthening the Federation 3. 77 Provincial Para-Diplomacy and Intergovernmental Relations 4. 88 Building Coalitions―a Strategy based on Provincial Jurisdiction Section 2: 91 Exploring and Attracting Attention1. 93 Networking Dinner in Quebec City (December 2006) a) 94 Exploiting the Myth of Davos (January 2007)b) 94 Finding Partners across the Atlantic2. 96 Convincing the European Commission: From ‘Global Europe’ to Bilateral Relations with Canada? a) 97 Finding Allies among Member Statesb) 100 Securing Domestic Support: Convincing the Federal and Provincial Governments 3. 104 Ensuring the Federal Government’s Commitment a) 104 Table of Contents 10 Gaining Provincial Supportb) 107 Bringing a New Economic Agreement to the Policy Agenda 4. 111 The Prelude: the Canada-EU Summit in Berlin (June 2007) a) 111 The Overture: the Canada-EU Summit and the bilateral France-Quebec visit in Quebec City (October 2008) b) 112 Launching Negotiations: the EU-Canada Summit in Prague (May 2009) c) 117 Conclusion 120 Public Procurement―a Promise Made, a Promise Kept?Chapter 3: 123 Canadian Federalism and Provincial Public Procurement Section 1: 126 International Trade and Provincial Jurisdiction over Procurement 1. 126 The Legacy of the Quiet Revolution: Quebec’s Procurement in the Tradition of State Dirigisme 2. 133 Re-evaluating Public Procurement as an Instrument for Provincial Development―the Small Open Economy Frame Section 2: 136 A Keystone of the Agreement: Public Procurement in the Overall Negotiation Process 1. 137 An Unexpected Negotiation Outcome2. 141 Reconfiguring the Role of the Provincial State: The Unfolding of the Negotiation Process in Quebec 3. 146 From State Dirigisme to a Small Open Economy (2009-2012) a) 148 Diverging Conceptions of Provincial Interests: Mass Transit Equipment and Bombardier aa) 160 Opposition to Opening Energy Procurement: "Le Saint-Graal de l’Hydro- Québec" bb) 165 Municipal Water and Waste Management: For Sale? cc) 173 Table of Contents 11 The PQ’s Alignment to the Liberals’ Strategy (2012-2014) b) 180 Conclusion 187 Attracting Foreign Direct Investment―a Discursive Conciliation for Province-Building Chapter 4: 191 Foreign Direct Investment in Quebec and Canada before CETA Section 1: 192 Overlapping Jurisdiction over Foreign Direct Investment: Institutional Developments 1. 193 Canada’s Changing Foreign Direct Investment Interests: There and Back Again 2. 195 ‘L’apport déterminant des investissements étrangers dans la croissance économique québécoise’ 3. 200 Negotiating A Comprehensive Investment ChapterSection 2: 205 Reinvigorating Investment Relations between Canada and the EU: Exploring the Bilateral Avenue 1. 206 A Comprehensive Approach to Investment in CETA 2. 210 A More Autonomous Provincial Investment Policy for Quebec 3. 214 Setting the Agenda for Attracting Foreign Capital (2006-2009) a) 215 A Controversy over the Need for State Dirigisme (2009-2012) b) 224 Protecting Provincial State Sovereignty (10.2012-04.2014; 05.-12.2014) c) 230 Conclusion 244 Agricultural Trade – Abolishing the ‘Loi du Camembert’? Chapter 5: 247 Agricultural Production and Trade in Quebec and Canada Section 1: 249 Agricultural Policies in Quebec and Canada before CETA: The Co-Existence of Dirigisme and Small Open Economy Frames 1. 249 Table of Contents 12 International Trade and Agriculture in Canada (1986-2009) 2. 257 From Province-Building to Federalism―Reconfiguring the Boundaries of Agricultural Production Section 2: 262 Agriculture throughout the CETA Negotiation Process (2006-2014) 1. 262 Changing Interests on Agriculture? A Discursive Strategy for Legitimising Cracks in the Fabric of Supply Management 2. 267 Firm Positions on Protecting Supply Management in Quebec (2009-2012) a) 270 Mounting Tensions between State Dirigisme and Small Open Economy: Challenges for the Co-Existence of two Incommensurate Frames (10.2012-04.2014) b) 277 Anchoring Agriculture as a Federal Issue (05.2014-12.2014) c) 295 Conclusion 301 Conclusion: results and outlook 304 Primary Empirical Sources 311 Press Articles and Opinion PiecesI. 311 Policy DocumentsII. 312 Overview of Parliamentary Debates on Trade with Europe in Quebec's National Assembly (2008-2014) 1. 312 Overview of Press Releases on Commerce by the Council of the Federation (2004-2014) 2. 314 Other Policy Documents and Public Statements3. 316 Governmental/ International Organizational Sources3.1. 316 Company/ Interest Group Sources3.2. 320 Legal CasesIII. 322 Bibliography 323 Index 345 Table of Contents 13 List of Figures Figure 1 – Relation between Repertoires and Frames 48 Figure 2 – Chronology of Empirical Case Studies (2006-2014, simplified) 55 Figure 3 – Green Energy and International Trade 168 Figure 4.1 –"Special Offer" 175 Figure 4.2 –"CETA Threatens Municipal Water Services" 175 Figure 5 – Graphical Explanation of a Tariff-Rate Quota 259 15 List of Tables Table 1 – Coding Occurrences for Topics for Negotiation Stages 54 Table 2 – Case Design (Overview) 57 Table 3 – Conceptualisation of Actors at Aggregated Level and Corresponding Units of Analysis 59 Table 4 – Overview of Interviews Conducted 60 Table 5 – Template for Systematic Summary by Units of Analysis (Units A-Z) 64 Table 6 – Coding Scheme 66 Table 7 – Example of a Coding Matrix for Interests A-Z 68 Table 8 – Evolution of Share of Total Public Procurement by Procuring Entity (1995-2012) 127 Table 9 – Comparison between General Value Thresholds in CETA’s Public Procurement Provisions and the Canada-US Agreement on Government Procurement 143 Table 10 – Percentage of Energy GDP in Total Province GDP (selected provinces, 2007 – 2014) 144 Table 11 – Total Coding on Public Procurement per Negotiation Period (Percentages of total discourse on CETA, 2006-2014) 148 Table 12 – Value Thresholds for Quebec Companies on the EU’s Public Procurement Market: The Agreement on Government Procurement (GPA) and the Comprehensive Economic and Trade Agreement (CETA) (Goods and Services) 154 17 Table 13 – Frames by Political Parties at Different Negotiation Stages (Percentages of Total Discourse at a Certain Negotiation Stage) 156 Table 14 – Topics during the First Negotiation Stage (Percentage of Discourse on Public Procurement, 2009-2012) 160 Table 15 – Procurement Value (Goods and Services) by Hydro- Québec (CAD billion per year) 170 Table 16 – Overview of the Most Prevalent Topics, Actors and their Claims 177 Table 17 – Evolution of Importance of the Topics "Market Access" and "Privatisation" for PQ and PLQ (Share of Topic in Total Discourse on Public Procurement at Respective Negotiation Stage) 185 Table 18 – General and Specific CETA Thresholds for Procuring Activities under Provincial Jurisdiction (SDR) 187 Table 19 – Total Coding on Investment and Investment Protection per Negotiation Period (2006-2014) 215 Table 20 – Most Important Topics during Agenda-Setting Stage (Percentage of Total Discourse on FDI, 2006-2009) 217 Table 21 – Evolution of the Relative Importance of ‘Measures to Attract FDI’ and ‘Natural Resource Extraction’ at Different Negotiation Stages 217 Table 22 – Capital Investment to Quebec in Machinery, Equipment and Non-residential Construction by Country of Company Ownership (2004-2011) 219 Table 23 – Most Important Topics during First Negotiation Stage (Percentages of Total Discourse on FDI, 2009-2012) 225 List of Tables 18 Table 24 – Evolution of the Relative Importance of ‘Performance Requirements’, ‘Natural Resource Extraction’ and ‘Cultural Industries’ (Percentage at Different Negotiation Stages) 225 Table 25 – Most Important Topics during Second Negotiation Stage (Percentages of Total Discourse on FDI, 2012-2014) 232 Table 26 – Evolution of the Relative Importance of ‘Investment Protection and Dispute Resolution’ at Different Negotiation Stages 232 Table 27 – Industrial and Fluid Milk Quota per Province (million kg of butterfat, rounded), as of 1 August, for indicated year 253 Table 28 – Coding on Agriculture per Negotiation Period (Percentage of Total Discourse on CETA, 2006-2014) 268 Table 29 – Relative Importance of Specific Topics at Different Negotiation Stages (percentage of Total Discourse on Agriculture) 269 Table 30 – Cheese Production by Province (2003-2015) 279 Table 31 – Repertoires Used by PQ and PLQ at Different Negotiation Stages 290 Table 32 – Frames at Different Negotiation Stages (Percentages of Total Discourse at Specified Negotiation Stage, 2006-2014) 299 Table 33 – Summary of Repertoires, Frames and Discursive Strategies Deployed by Quebec’s Representatives 304 List of Tables 19 List of Abbreviations AGP Canada–United States Agreement on Government Procurement ARRA American Recovery and Reinvestment Act CAD Canadian Dollar CAQ Coalition Avenir Québec CETA Comprehensive Economic and Trade Agreement CORIM Conseil des Relations Internationales de Montréal CUPE/ SCFP Canadian Union of Public Employees/ Syndicat Canadien de la Fonction Publique CUSFTA Canada-US Free Trade Agreement GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GPA Agreement on Government Procurement (WTO) NAFTA North American Free Trade Agreement OECD Organisation for Economic Co-operation and Development PLQ Parti Libéral du Québec PQ Parti Québécois RQIC Réseau Québécois d’Intégration Continentale SFPQ Syndicat de la Fonction Publique et Parapublique du Québec WTO World Trade Organization 21

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Abstract

This discourse analysis examines the trade policy interests of the province of Quebec during the CETA negotiations between Canada and the EU (2006–2014). The negotiation of the agreement’s chapters ‘Public Procurement’, ‘Foreign Direct Investment’ and ‘Agriculture’ from Quebec’s perspective documents that the provincial government drew upon existing repertoires of ideas in order to develop Quebec’s interests in a complex transatlantic setting and advance them skilfully. Canadian federalism as well as economic, political and cultural development discourses provided the framework for interpreting current and historical events, and for forging alliances to assert the province’s position. This study is based on the systematic quantitative analysis of parliamentary debates in Quebec and the qualitative evaluation of structured interviews with members of government, civil servants, business associations and NGOs.

Zusammenfassung

Die diskursanalytische Arbeit untersucht die handelspolitischen Interessen der Provinz Quebec während der CETA-Verhandlung zwischen Kanada und der EU (2006-2014). Die Verhandlung der Vertragskapitel „Öffentliche Vergabe“, „Ausländische Direktinvestition“ und „Landwirtschaft“ aus der Perspektive Quebecs macht deutlich, dass die Regierung aus bestehenden Ideenrepertoires schöpfte, um Quebecs Interessen in einem komplexen transatlantischen Gefüge zu entwickeln und geschickt voranzutreiben. Den Bezugsrahmen, um aktuelle und historische Vorgänge zu interpretieren und Allianzen zur Durchsetzung der eigenen Position zu schmieden, stellten dabei insbesondere der kanadische Föderalismus sowie wirtschaftspolitische und kulturelle Entwicklungsdiskurse dar. Die Untersuchung basiert auf der systematischen quantitativen Analyse von Quebecer Parlamentsdebatten sowie der qualitativen Auswertung strukturierter Interviews mit Regierungsmitgliedern, Verwaltungsbeamten, Wirtschaftsverbänden und NGOs.