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International Trade - Canada-European Union Comprehensive Economic and Trade Agreement (CETA). Thales DIS Canada Inc. v. Ontario
In Thales DIS Canada Inc. v. Ontario (Div Court, 2022) the Divisional Court sets out some basics of the CETA international trade treaty:The Canada-European Union Comprehensive Economic and Trade Agreement
[18] Canada and the European Union (“EU”) entered into the CETA in September 2017 with the objective of eliminating trade barriers between them. The CETA is based on principles of reciprocity and fairness between the parties and covers virtually all sectors of trade between Canada and the EU.
[19] Chapter 19 of the CETA deals specifically with government procurement and includes central, sub-central, municipal government entities and government enterprises. The general principles are non-discrimination, transparency and impartiality. Article 19.4 – General Principles states as follows:Article 19.4 – General Principles
Non-Discrimination
1. With respect to any measure regarding covered procurement, each Party, including its procuring entities, shall accord immediately and unconditionally to the goods and services of the other Party and to the suppliers of the other Party offering such goods or services, treatment no less favourable than the treatment the Party, including its procuring entities, accords to its own goods, services and suppliers….
2. With respect to any measure regarding covered procurement, a Party, including its procuring entities, shall not:
a. treat a locally established supplier less favourably than another locally established supplier on the basis of the degree of foreign affiliation or ownership; or
b. discriminate against a locally established supplier on the basis that the goods or services offered by that supplier for a particular procurement are goods or services of the other Party.
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[Emphasis added.] [20] Article 19.3 of the CETA creates an exception to Article 19.4 for the protection of essential security interests:Article 19.3 – Security and general exceptions
1. Nothing in this Chapter shall be construed to prevent a Party from taking any action or from not disclosing any information that it considers necessary for the protection of its essential security interests relating to the procurement:
a. of arms, ammunition or war material;
b. or to procurement indispensable for national security; or
c. for national defence purposes.
2. Subject to the requirement that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between Parties where the same conditions prevail or a disguised restriction on international trade, nothing in this Chapter shall be construed to prevent a Party from imposing or enforcing measures:
a. necessary to protect public morals, order or safety;
b. necessary to protect human, animal or plant life or health;
c. necessary to protect intellectual property; or
d. relating to goods or services of persons with disabilities, of philanthropic institutions or of prison labour.
[Emphasis added.] [21] Article 19.9 of the CETA contains requirements pertaining to technical specifications and tender documentation, which are not to have the effect of creating unnecessary obstacles to international trade. Article 19.9(7) requires that a procuring party “make available to suppliers tender documentation that includes all information necessary” to permit suppliers to prepare and submit responsive tenders.
[22] Article 19.17(1), the dispute resolution provision, requires that each party provide “a timely, effective, transparent and non-discriminatory administrative or judicial review procedure” through which a supplier may challenge a breach of Chapter 19 or a failure to comply with a party’s measures implementing the Chapter. Articles 19.17(4) – (6) set out dispute resolution and procedural protection requirements.
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