National News

Harper, Barroso meet to discuss stalled deal

By Mike Blanchfield, The Canadian Press

BRUSSELS - Stephen Harper arrived Wednesday in Brussels for the G7 summit — but his first order of business was to kick-start his stalled free-trade deal with the European Union.

The prime minister met with European Commission President Jose Manuel Barroso, about an hour prior to the official opening of the G7 summit, where the Ukraine-Russia crisis dominated discussion.

In a communique issued late Wednesday, the G7 leaders condemned Russia's illegal annexation of Crimea in March.

"We are united in condemning the Russian Federation's continuing violation of the sovereignty and territorial integrity of Ukraine," it said.

The G7 also called on armed groups in eastern Ukraine to disarm, while urging Ukrainian authorities to use a "measured approach" to restore law and order.

But before the summit was formally underway, Harper appeared eager to make progress towards getting a final text of the Comprehensive Trade and Investment Agreement, or CETA.

Harper flew to Brussels to meet Barroso in a high-profile ceremony last October to sign an agreement in principle on the deal.

But the final, lawyer-approved document remains an elusive entity as some of the major irritants that stalled the protracted four-year negotiations reared their heads yet again in recent weeks.

According to EU documents, these include a disagreement over protection of intellectual property rights in the pharmaceutical sector, among other irritants.

The Harper government insists the delays are simply a matter of hammering out the precise final legal text, and are not a matter of substantive disagreement.

The Prime Minister's Office expressed optimism in a statement after Wednesday night's meeting.

"Leaders were pleased that the process to finalize the text, further to the agreement in principle announced last October, remains on track," said the PMO readout.

"Leaders noted the positive momentum of ongoing technical work on the final text of the agreement and agreed to stay regularly in touch as this phase of work concludes."

A stalled or scuttled deal would be politically damaging to Harper, who views a comprehensive deal with the EU's 28-country bloc to be the jewel in his crown of a series of much smaller trade agreements.

Aides to Harper, who spoke on the condition of anonymity earlier in the week, had played down any suggestion that Harper might piggyback on the G7 summit to push the trade deal.

Sources suggested that it was unlikely the Harper and Barroso would talk trade in Brussels, even though both leaders would see each other at the G7 meeting.

But that changed Wednesday evening as Harper was seen entering the main G7 summit building in rainy downtown Brussels a full hour before his scheduled official arrival.

Harper moved quickly to a small seventh-floor room in the summit building, where a crush of cameras converged on him and Barroso seated before their respective flags.

Both leaders grinned broadly and stood for several seconds shaking hands and looking directly at the throng of cameras without speaking.

Harper and Barroso struck up a strong personal rapport last fall in the weeks leading up to their October announcement, apparently breaking the logjam after four years of stalled talks. At the October signing ceremony, Barroso praised Harper as a skilled negotiator, giving him political cover.

However, the political ground is shifting significantly in Europe since Harper was last here in October, and if the final legal text of the deal doesn't come soon, the prime minister could face a cast of less trade-friendly characters.

Not only is the EU now focusing on a new, separate round of free trade negotiations with the United States, which means the less attention on Canada, but the May 25 elections in the European parliament brought victories to parties on the far right and far left that are less than friendly towards economic integration.

The influential German magazine Der Spiegel reported this past week that the prime minister of tiny Luxembourg is vying to succeed Barroso later this year for the EU presidency — and he is reportedly not a fan of trade liberalization.

Earlier this week, Harper's office would offer only a guarded assessment of how Europe's shifting politics could affect the deal.

"Regarding the EU presidency, that's an issue for the EU's member countries to address if they feel it necessary," an aide to Harper said, speaking on condition of anonymity because he wasn't authorized to discuss the matter publicly.

"We will work with whoever is in the role to further our common interests."

Last month, EU Trade Commissioner Karel De Gucht said the final technical discussions "have proven to be more difficult than originally foreseen."

A EU briefing note identified intellectual property rights for pharmaceuticals, financial services, tariff rates, geographical indications and investment protection as problem areas.

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