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Canadian visual artists, who have been hoping for the establishment of an Artists Resale Right (ARR) as part of a successful conclusion to the Canada-UK Free Trade Agreement negotiations, may become collateral damage if the talks breakdown completely. As I wrote in a blog post a year or so ago (“Will the “Artists’ Resale Right” Come to Canada and the US”), it had been expected that an ARR would be included as a reciprocal obligation in the bilateral trade agreement between Britain and Canada that, until the end of this January, was under negotiation. Canada is one of a handful of countries that does not have a resale provision that allows artists to earn a small financial return from sales of their works when they are resold through galleries. The ARR exists in Britain, but British artists would welcome expansion of the regime to Canada, thus expanding its reciprocal nature and allowing them to benefit from resales of their work in Canadian galleries. For their part, Canadian artists have long pushed for the institution of a resale right in Canada and saw the trade negotiations with Britain as a likely vehicle to make this happen, especially given language in the 2021 mandate letter for the minister responsible for the Copyright Act that he should work, “…to further protect artists, creators and copyright holders, including to allow resale rights for artists.” If an ARR was included as a trade agreement commitment with Britain, as it was in the UK-Australia and UK-New Zealand trade agreements, it would require both countries to provide reciprocal benefits to artists from either country. For Canadian artists, this would give them access to ARR provisions in Britain as well as resale royalties when their works were sold in Canada, a positive double whammy.
But all this was thrown in doubt when, on January 25, the UK announced it was suspending the trade talks because of an impasse over access to the Canadian market for British cheese. After Britain’s myopic and misguided departure from the EU through Brexit, it lost the access to the Canadian market that it had enjoyed under CETA, (the Canada-EU bilateral trade and economic treaty). However, to allow time for the negotiation of a standalone Canada-UK Agreement to replace Britain’s CETA obligations and benefits, a transitional arrangement was put in place known as the TCA (Trade Continuity Agreement). The TCA is meant to bridge the gap until such time as a formal bilateral Canada-UK Free Trade Agreement can be reached. However, some of the provisions of the TCA sunset after a period of time, and one of those provisions is the allowance for British cheeses to enter Canada under the preferential EU quota. That special import provision ended on December 31, 2023.
Canada’s dairy market is highly protected under a supply management system whereby production of dairy products is controlled through production quotas allocated to a privileged few producers in order to “stabilize prices”, i.e. keep prices and thus incomes high for these producers at the expense of consumers. In my view, it is a short-sighted and counterproductive policy that benefits a small cadre of dairy producers not only at the expense of all Canadian families, but also to the detriment of other Canadian export sectors which are disadvantaged when Canada is weakened in its goal of opening foreign markets because it has to pay a price for blocking dairy imports. Yet the dairy lobby, centred in Quebec, is highly organized and influential politically. To limit competition and prevent lower priced imports from undercutting the government-sanctioned prices of the dairy cartel, Canada imposes punitive import tariffs on dairy products, including cheese. Of course, Canadians like imported cheeses as much as anyone else, so limited import quotas at manageable tariffs have been negotiated. Under CETA, the EU (of which Britain was a member at the time) was able to negotiate a “tariff rate quota” (TRQ) of 16 million kilos of cheese to Canada annually at a lower rate of duty. Cheese imports falling outside the TRQ are subject to tariffs of over 200%. However, the clock has run out on Britain’s free ride on the EU cheese quota, and negotiations to establish a new, separate quota for Britain have gone nowhere.
Both countries share some of the blame; Canada because, under domestic political pressure from the dairy cartel, it refuses to make any further concessions on dairy and Britain, because it refuses to “earn” concessions from Canada through offsetting benefits in other agricultural areas, such lowering barriers to Canadian beef exports. This is another longstanding issue. Most Canadian beef cattle are given artificial growth hormones in their feed. Britain refuses to allow imports of beef treated with artificial growth hormones, in company with the EU. Growth hormones are commonly used in many beef growing countries (Canada, US, Australia for example) to enhance production without any apparent negative impacts on human health, but there is consumer resistance to hormone-enhanced beef in Europe. Both Canada and the US export hormone-free beef to the EU, but certification can be cumbersome and costly, negatively impacting costs and export volumes. Canada and the UK are now caught up in the same issue. Whatever the rights and wrongs (and this is often in the eye of the beholder), in an attempt to pressure Canada, British negotiators have now suspended negotiations.
Normally, one would consider this as a negotiating tactic and would expect negotiations to resume at some point. This is of course a possibility, something that would be welcomed by the artistic community if it gets the agreement back on track. But Canada and the UK have already agreed on another set of binding commitments that will bring predictability and tariff free trade in many areas through their joint membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), in company with ten other states. The Artists Resale Right does not figure in the CPTPP.
Although the CPTPP framework will not resolve the issue of access for British cheese or Canadian beef it, along with the parts of the Trade Continuity Agreement that remain in force, may provide a sufficient framework for continued UK-Canada trade and investment. And if that happens, the artistic sector will have been left by the wayside as roadkill.
It is too early at this stage to say what will happen. Of course, the Canadian government could decide to introduce a resale right without any reference to Britain or a bilateral trade agreement, but trade negotiators have a way of hanging on to “coinage” (what the other side may consider as a concession) in the event that it may need to be used on a future occasion. If this is the case, the ARR may be held hostage to the UK-Canada standoff over dairy, and Canadian visual artists will become yet one more victim of Canada’s ridiculous supply management system. That would really cheese me off.
© Hugh Stephens 2024. All Rights Reserved
