CETA Clears Ratification Hurdle with EU Parliament Trade Committee Backing

26 January 2017

The proposed Comprehensive Economic and Trade Agreement (CETA), a free trade agreement negotiated between Canada and the EU, acquired the support of the European Parliament’s trade committee (INTA) on Tuesday 24 January, advancing one step closer towards ratification of the deal.

The recommendation was approved by INTA during a two-day meeting of the committee. The vote passed by a margin of 25 votes to 15, with one abstention, allowing for the transmission of the accord to the full European Parliament plenary. The 751-member legislative body is expected to vote on its entry into force in Strasbourg next month.

Non-binding opinions have also been adopted in additional committees in recent months, yielding an affirmative vote from the environment, public health, and food safety (ENVI) committee, but a negative outcome from the committee on employment on social affairs (EMPL), with the latter citing concerns over potential job losses in some sectors. (See Bridges Weekly, 19 January 2017

The planned agreement, aimed at boosting trans-Atlantic trade in goods and services and investment flows, has elicited mixed responses since negotiations were concluded. It encountered vocal opposition from the Belgian region of Wallonia before it was ultimately signed in October 2016, specifically with regards to the replacement of the investor-state dispute settlement (ISDS) mechanism with a new Investment Court System. (See Bridges Weekly, 3 November 2016)

The deal also contains provisions on e-commerce, competition, intellectual property, government procurement, and dispute settlement, with detailed labour, environment, and sustainable development chapters, promising to cut 99 percent of tariffs once fully implemented. Tariffs on public services, transport services, and certain agricultural products are not included in the scope of the agreement.

Proponents of the deal have said that it can provide a useful response to the public backlash in some quarters regarding the potential negative effects of trade liberalisation and globalisation – a topic that has increased in resonance following the US presidential election and the UK’s Brexit referendum.

"By approving CETA today we take a significant step forward. In the face of rising protectionism and populism, Parliament is able and willing to act on behalf of European citizens. I stand for a strong and global Europe and for open markets,” said Artis Pabriks of Latvia, the European Parliament’s rapporteur for the CETA agreement, prior to the committee outcome.

Chrystia Freeland, the new Canadian Minister for Foreign Affairs as of 10 January, noted the CETA’s symbolic weight in an address to the Toronto Region Board of Trade in December.

“Let’s reflect for a minute on how astonishing it is in 2016 the year of Brexit, the year the president-elect of the United States has done a YouTube video saying one of his first jobs is to tear up the [Trans-Pacific Partnership], that we are actually getting done probably the deepest trade agreement in our history with an economic grouping of half a billion people,” said Freeland at the time.

The EU ranks as Canada’s second largest trading partner, where EU imported goods from Canada amounted to €28.3 billion (US$30.4 billion) and exported goods to €35.2 billion (US$37.8 billion) in 2015, figures that are projected to increase by over 20 percent upon full implementation of the accord.

Assuming Freeland’s previous post, François-Philippe Champagne has been named the new Canadian Trade Minister and will be responsible for heading the implementation of CETA. Champagne, referring to himself as “chief marketing officer” for the merits of international trade, has identified CETA’s swift entry into force as a top priority, and is quoted as saying, “this is my priority number one, two and three – CETA, CETA, CETA.”

"CETA will also provide a strong foundation for Canada and the EU to demonstrate leadership on an inclusive, progressive approach to global trade," he added.

In Canada, implementation bill C-30 is undergoing parliamentarian consideration. (Freeland assumed a hopeful note for the outlook in Canada in December, stating that “[CETA] still needs to be ratified by the European Parliament and I’m counting on European diplomats to be sure that happens. I’m counting on you guys. We’re confident of ratification here in Canada.” See Bridges Weekly, 1 December 2016)

Next steps

The agreement is now pending consideration by the full European Parliament in the February plenary, along with completing the domestic approval procedures in Canada. Should approval be secured, most sections of the deal could apply provisionally starting from April 2017.

CETA’s mixed agreement status, with its subjects falling under either EU or member state competences, means that it will also need to be ratified by the national and – where relevant – regional parliaments of the 28-nation bloc for full entry into force. (See Bridges Weekly, 7 July 2016)

ICTSD reporting; “Canada-EU trade agreement clears two more hurdles in Europe,” CBC NEWS, 12 January 2017; “CETA a bright light against a protectionist world, says Chrystia Freeland,” CBC NEWS, 31 October 2016; “European Parliament’s trade committee endorses Canada’s free trade deal,” CBC NEWS, 24 January 2017; “Former engineering exec handed international trade in cabinet shuffle,” DCN NEWS SERVICES, 16 January 2017; “Optimism Emerges in Canada in Spite of Trump’s TPP, Nafta Moves,” BLOOMBERG, 24 January 2017; “Canada PM Justin Trudeau shuffles key Cabinet ministers,” BBC NEWS, 11 January 2017; “Freeland is hanging on to the Canada-U.S. trade file,” IPOLITICS, 10 January 2017.

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