Lawmakers in EU, Canada Begin Consideration of CETA Trade Deal

1 December 2016

The next stage in the approval process for the EU-Canada trade pact is now getting underway, officials say, with parliamentary committees in Europe preparing to vote on the accord in the coming weeks. On the other side of the Atlantic, the deal has already been tabled in the Canadian parliament for legislative consideration.

The Comprehensive Economic and Trade Agreement (CETA) was signed by EU and Canada leaders in October, following weeks of negotiations to win over the backing of some individual member states and their regional legislative bodies. (See Bridges Weekly, 3 November 2016)

With the accord now having European Council approval and signature of both EU and Canada leaders, sign-off from parliamentarians will be the final step before the deal can be put provisionally in place. On the EU side, some aspects of the deal will require member state ratification, with full implementation only possible thereafter. Trade officials from both sides say that they aim to see provisional implementation take place in 2017.

However, nearly 90 European Parliament lawmakers had recently asked for the bloc’s highest court – the European Court of Justice (ECJ) – to examine whether investor protection terms included in the final version of the accord are crafted in a way that still ensures the “right to regulate” in the public interest.

The EU-Canada agreement is among the first deals to incorporate the new “investment court” system that the 28-nation bloc is aiming to include across its future accords, as a possible precursor to a proposed “global investment court.” (See Bridges Weekly, 3 March 2016 and 7 May 2015, respectively)

The push for an ECJ review was ultimately blocked by a 419-258 vote margin on 23 November, enabling CETA to begin going through the Parliament’s committee stages. The EU legislative body had also asked its legal service to review whether CETA’s investment terms were in line with the bloc’s treaties, with the subsequent report finding that these were not incompatible.

Malmström makes CETA push

This week, EU Trade Commissioner Cecilia Malmström spoke at various European Parliament committees – specifically the panels on international trade, employment and social affairs, and agriculture – to make a push for the value of the EU-Canada pact.

Speaking to the International Trade Committee and the Employment and Social Affairs Committee on Tuesday, the EU trade chief reinforced that CETA can be a boon both for the bloc’s economy as well as for its efforts at supporting sustainable development-focused rulemaking, while acknowledging that the current political climate for trade is increasingly fraught.

“Suffice it to say that there are many people who feel economically disadvantaged by the new global economy. And that this is an important factor in the rise of populist and nationalist movements, who see trade as a problem,” she said.

Indeed, public tensions over trade have seen a notable escalation throughout the year, both within Europe, as seen partly during the contentious CETA signing process that saw several delays and round-the-clock negotiations, as well as during the US presidential election held earlier this month. (See Bridges Weekly, 10 November 2016)

The EU trade official also suggested that communication to the public on trade can be improved – while at the same time highlighting the value of focusing on facts.

Approving CETA, she added, will be an essential component in supporting a broader strategy to keep European exporters competitive, along with helping EU companies to source the necessary imports for domestic production – both of which would help create more jobs at home. It will also help enshrine and support shared values, including on the protection of labour rights, while supporting European goals on issues such as environmental protections.

“It’s an excellent agreement that will do much to support and create high-quality jobs across Europe. I would urge you to look at it with an open mind and I hope that when you do that you will support it,” she told parliamentarians.

The EU trade chief also argued for governments to take more steps domestically to help support those who suffer the negative ramifications of increased international competition, calling for additional action on infrastructure investment and education, among other steps.

This includes the ongoing review of the European Globalisation Adjustment Fund, a scheme which currently helps co-finance job training and education, along with new business ventures for people who have lost their jobs through factors such as changed trade dynamics or the financial crisis.

Touting CETA’s agricultural provisions, Malmström told the trade and agriculture committees in a separate meeting that the tariff cuts and negotiated quotas under CETA will provide a massive increase in terms of market access, allowing European farmers to export such goods more cheaply – while also protecting over 140 “geographical indications” on various products.

Geographical indications (GIs) are used to denote a product’s place of origin, which are associated with reputational and quality characteristics. The protection of GIs has long been a major issue for the European Union, with annual GI exports hitting over €11 billion annually.

Canadian approval process underway

While the European Parliament committees will continue working on the CETA approval process this month and likely through early 2017, both CETA and the related implementing legislation have already been tabled for consideration in the Canadian House of Commons, getting the legislative approval process underway in the North American economy.

Chrystia Freeland, who serves as Canada’s international trade minister, has similarly argued that advancing the CETA pact could help stave off growing protectionist pressures.

“The protectionist backlash we’re seeing in a lot of the world, including in Europe, is dangerous. In being able to get CETA signed ... Canada has done something very powerful and very strong in the world to push back against that,” said Freeland last month, according to comments reported by CBC News.

ICTSD reporting; “CETA a bright light against a protectionist world, says Chrystia Freeland,” CBC NEWS, 31 October 2016.

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