EUROPEAN INTEGRATION: THE IMPLICATIONS FOR CANADA
The Standing Senate Committee on Foreign Affairs
Chairperson: The Honourable John B. Stewart
Deputy Chairperson: The Honourable Pat Carney, P.C.
JULY 1996
TABLE OF CONTENTS
I. INTRODUCTION: CHANGING CIRCUMSTANCES IN EUROPE AND NORTH AMERICA
II. THE EUROPEAN UNION: WHAT IS IT? WHERE IS IT GOING?
A.The Formative Period
B.The "Golden Age"
C.The Era of Europessimism
D.The "Renaissance" Period
E.European Integration Suffers a Setback
III.CANADA-EU TRADE AND INVESTMENT LINKS
A.Introduction
B.Canada-EU Merchandise Trade
C.Canada-EU Services Trade
D.Canada-EU Investment Links
E.Conclusion and Recommendation
IV. MAJOR CANADA-EUROPEAN UNION IRRITANTS
A.Introduction
B.Canada-EU Fisheries Dispute
C.Classification of Sea Scallops
D.The EU Fur Ban
E.Pinewood Nematode (PWN)
F.Geographical Indications for Wines and Spirits
V. ECONOMIC AND MONETARY UNION
A.Introduction
B.The Werner Report
C.The European Monetary System
D.The Delors Report
E.The EMU Convergence Criteria
- Price Stability
- Interest Rates
- Public Deficits
- Public Debt
- Exchange Rates
F.Meeting the Convergence Criteria
G.The ECB's Mandate and Powers
- ECB Independence
- The Price Stability Goal
- Monetary Policy Instruments
- The "No Bail-Out" Clause
H.The Benefits of EMU
- Lower Transaction Costs
- Reduction in Exchange Rate Variability and Uncertainty
- Enhancing Price Stability
- Public Finance
- Completion of the Internal Market
I.The Costs of EMU
- Loss of an Independent National Monetary Policy
- Fiscal Constraints
- The "Ins" and the "Outs"
- Other Costs
J.EMU's Effects on the Outside World
- The Demand for International Currencies
- Trade and Investment Patterns
- International Policy Coordination
K.Conclusion and Recommendations
VI. THE 1996 INTERGOVERNMENTAL CONFERENCE ("Maastricht II")
A.Introduction
B.The IGC Process
C.The IGC Agenda
D.Recommendation
VII. EUROPEAN UNION ENLARGEMENT
A.Introduction
B.Prospective EU Members
C.The Internal Implications of Enlargement
D.The Implications of Enlargement for Canada
E.Conclusion and Recommendations
VIII. THE COMMON FOREIGN AND SECURITY POLICY
A.Introduction
B.The Origins of European Political Cooperation
C.The Common Foreign and Security Policy
D.Operational Assessment
E.Proposals for Change
F.The Implications of European Integration for NATO
G.Conclusion and Recommendations
A.Introduction
B.Background
C.The Maastricht Treaty
D.Operational Assessment
E.Proposals for Change
F.Conclusion and Recommendation
A.The Framework Agreement
B.The Transatlantic Declaration
C.The Science and Technology Cooperation Agreement
D.The Higher Education and Training Cooperation Agreement
E.Parliamentary Links
F.The Transatlantic Dialogue
- The Origins of the Transatlantic Dialogue
- The U.S.-EU Action Plan
- Canada-EU Negotiations
(i) Elements of the Canadian Proposal for an Action Plan
(a) Economic and Trade Issues
(b) Foreign Policy and Security Issues
(c) New Global Challenges
(ii) Discussion of the Canadian Proposal for an Action Plan
(iii) The European Commission's Proposal for an Action Plan
(iv) The Action Plan Negotiations Reach an Impasse
G.Conclusion and Recommendations
APPENDIX A - Fact-Finding Mission to Europe
APPENDIX B - List of Witnesses
MEMBERS OF THE COMMITTEE
(July 5, 1996)
Pursuant to the Order of Reference made by the Senate on May 25, 1995, the Committee began to study the implications for Canada of developments in Europe. The 1995-1996 Session of Parliament was prorogued on February 28, 1996. The Order of Reference was renewed on February 28, 1996, in the Session that began on February 27, 1996.
The Members of the Committee:
The Honourable John B. Stewart
Chairperson
The Honourable James F. Kelleher, P.C.
Deputy Chairperson (1995-1996 Session)
The Honourable Pat Carney, P.C.
Deputy Chairperson (1996 Session)
and the Honourable Senators
|
Andreychuk Bacon Bolduc Corbin *Fairbairn, P.C. (or Graham) Gauthier |
Grafstein *Lynch-Staunton (or Berntson) MacEachen, P.C. Ottenheimer Stollery |
*Ex officio Members
(Quorum 4)
The following Honourable Senators also participated in the work of the Committee: Balfour, Charbonneau and Gigantès.
ORDER OF REFERENCE
Extract from the Minutes of Proceedings of the Senate of Thursday, May 25, 1995:
With leave of the Senate,
The Honourable Senator Stewart moved, seconded by the Honourable Senator Gigantès:
That the Standing Senate Committee on Foreign Affairs be authorized to examine and report on the consequences of the economic integration of the European Union for the national governance of the member states, and on the consequences of the emergence of the European Union for economic, political, and defence relations between Canada and Europe; and
That the Committee present its final report no later than March 31, 1996.
The question being put on the motion, it was adopted.
-
ORDER OF REFERENCE
Extract from the Minutes of Proceedings of the Senate of Wednesday, February 28, 1996:
With leave of the Senate and notwithstanding rule 58(1)(f),
The Honourable Senator Stewart moved, seconded by the Honourable Senator Andreychuk:
That the Standing Senate Committee on Foreign Affairs be authorized to examine and report on the consequences of the economic integration of the European Union for the national governance of the member states, and on the consequences of the emergence of the European Union for economic, political and defence relations between Canada and Europe;
That the Committee have the power to engage the services of such counsel and technical, clerical and other personnel as may be necessary for the purpose of its examination and consideration of the said order of reference;
That the papers and evidence received and taken on the subject during the First Session of the Thirty-Fifth Parliament be referred to the Committee;
That the Committee have power to adjourn from place to place outside Canada;
That the Committee submit its final report no later than June 30, 1996; and
That, notwithstanding usual practices, if the Senate is not sitting when the final report of the Committee is completed, the Committee shall deposit its report with the Clerk of the Senate, and said report shall thereupon be deemed to have been tabled in this Chamber.
The question being put on the motion, it was adopted.
Paul C. Bélisle
Clerk of the Senate
NOTICE OF MOTION
Extract from the Senate Journals of Thursday, June 20, 1996:
With leave of the Senate,
The Honourable Senator Stewart moves, seconded by the Honourable Senator Lewis:
That, notwithstanding the order of reference of the Senate adopted on February 28, 1996, the Standing Senate Committee on Foreign Affairs, which was authorized to examine and report, no later than June 30, on the consequences of the economic integration of the European Union for the national governance of the member states, and on the consequences of the emergence of the European Union for economic, political and defence relations between Canada and Europe, be empowered to present its final report no later than July 18, 1996.
That, notwithstanding usual practices, if the Senate is not sitting when the final report of the Committee is completed, the Committee shall deposit its report with the Clerk of the Senate, and said report shall thereupon be deemed to have been tabled in this Chamber.
The question being put on the motion, it was adopted.
ACKNOWLEDGMENT
The Committee is grateful to all those who assisted us both during our public hearings in Ottawa and during the mission to Europe. By their analyses, their opinions, and their suggestions they broadened our horizons and strengthened our conviction that current developments in Europe are of great importance to Canada.
The fact-finding mission to Europe undertaken by some members of the Committee in March, 1996 advanced our work greatly. That mission would have been impossible without the close collaboration of Canada's ambassador in each of the European capitals visited, and the assistance of the Embassy staffs. We are most appreciative. Also, we want to thank the Ministers of Foreign Affairs and of International Trade and their officials for the valuable advice which they gave us. The Department confirmed its interest in our work by making available the services of Mr. Albert Galpin, of its European Union Division, who helped in both the planning and the execution of the mission. We are grateful to Mr. Galpin for his cooperation throughout an arduous undertaking.
We record our appreciation of the generous assistance given to us by Dr. Charles Pentland, Queen's University.
We have come to rely upon the diligence and professionalism of our research coordinator from the Library of Parliament, Mr. Anthony Chapman; in this complex study he justified our confidence in him. Mr. Serge Pelletier, our clerk, and Ms. Josée Thérien, his assistant, once more earned our appreciation for the smooth unfolding of the Committee's administrative, budgetary and logistical operations, especially in relation to the mission to Europe.
John B. Stewart
Chairman
List of Acronyms
APEC - Asia Pacific Economic Cooperation
BTO - Brussels Treaty Organization
CAP - common agricultural policy
CCT - Common Customs Tariff
CDIA - Canadian direct investment abroad
CEPA - Canada-Europe Parliamentary Association
CFSP - common foreign and security policy
CJTF - Combined Joint Task Force
Coreper - Committee of Permanent Representatives
DFAIT - Department of Foreign Affairs and International Trade (Canada)
DG II - Directorate-General II (of the European Commission)
EBRD - European Bank for Reconstruction and Development
EC - European Community
ECB - European Central Bank
ECSC - European Coal and Steel Community
ECU - European Currency Unit
EEA - European Economic Area
EDC - European Defence Community
EEC - European Economic Community
EMI - European Monetary Institute
EMS - European Monetary System
EMU - economic and monetary union
EPC - European Political Cooperation
ERM - Exchange Rate Mechanism
ESCB - European System of Central Banks
EU - European Union
FDIC - foreign direct investment in Canada
FIRA - Foreign Investment Review Agency
FTAA - Free Trade Area of the Americas
G-7 - Group of Seven (industrial countries)
GATT - General Agreement on Tariffs and Trade
GDP - gross domestic product
GNP - gross national product
IFOR - (NATO-led peace) Implementation Force (in Bosnia and Herzogovina)
IGC - Intergovernmental Conference
IMF - International Monetary Fund
ITA - Information Technology Agreement
JCC - Joint Cooperation Committee
MEP - Member of the European Parliament
MTAP - Military Training Assistance Program
NACC - North Atlantic Cooperation Council
NAFO - Northwest Atlantic Fisheries Organization
NAFTA - North American Free Trade Agreement
NAT - North Atlantic Treaty
NATO - North Atlantic Treaty Organization
OECD - Organization for Economic Cooperation and Development
OEEC - Organization for European Economic Cooperation
OSCE - Organization for Security and Cooperation in Europe
PfP - Partnership for Peace
PRA - pest risk assessment
QMV - qualified majority voting
RTD - Research and Technological Development (program)
SEA - Single European Act
SPD - Social Democratic Party (of Germany)
TAD - Transatlantic Declaration
TAFTA - transatlantic free trade area
TEU - Treaty Establishing the European Union
TREVI - (group of EU justice and interior ministers established to combat) terrorism, radicalism, extremism, and political violence
TRIPs - Trade-Related Aspects of Intellectual Property Rights
UK - United Kingdom
UN - United Nations
U.S. - United States
WEU - Western European Union
WTO - World Trade Organization