The other important condition for the success of the negotiations is that the agreement does not affect the competitive position of Canadian companies in the U.S. market. This means that any attempt to harmonize laws, rules, regulations and procedures cannot be at the expense of Canada`s economic relations with the United States. It is a « red line » for Canada. If the Europeans think that CETA is a springboard to a broader transatlantic agreement with the United States, one might consider that this condition is not very restrictive. But it may be naïve to believe that Europeans will be willing to compromise in the short term on CETA in order to increase the chances of a long-term agreement with the Americans. In any event, a transatlantic agreement involving the United States is unlikely to be achievable until 2021, after the 2020 presidential elections. CETA also highlights the institutional weakness of federal-provincial relations in negotiating international agreements affecting provincial jurisdictions. Indeed, Canada does not have a formal mechanism for negotiating such agreements, while the EU has the Council of Ministers, the European Parliament and the European Commission, and very elaborate rules for negotiating and ratifying international agreements. Canada`s weakness in this regard was highlighted at the United Nations climate change conference in Copenhagen last December, when Quebec acted to dismay, regardless of the federal government.
Most trade agreements use a « positive list » approach to decide which services are covered; this means that only the services listed in the agreement will be liberalized. CETA is the first EU trade agreement to adopt a « negative list » approach, meaning that all services are included, unless a country has explicitly considered it excluded. The problem with this approach is that it leads to a creeping liberalisation of public services, as negotiators do not contain sufficiently watertight exclusions and cannot predict what new services might be created in the future.