EU, Canada Prepare for CETA Provisional Application

6 April 2017

The EU and Canada are gearing up for the provisional application of the Comprehensive Economic and Trade Agreement (CETA), with some officials suggesting that this could begin as early as July.

After eight years of negotiations, CETA was ratified by the European Parliament in mid-February. The trade accord has become increasingly high-profile over the years, given the size of the economies involved, its investment dispute provisions, and the geopolitical context regarding trade more broadly. (See Bridges Weekly, 16 February 2017

Now, pending Canadian ratification, the provisional application of the sweeping trade and investment accord is said to be within grasp. The implementation bill for CETA is currently undergoing a “third reading” in the Canadian Senate and is expected to advance, officials say, with some provinces also needing to make their own legislative changes. Meetings in the senate’s foreign affairs and trade committee are going on this week.

According to Chapter 30 of CETA, once both sides have completed their internal procedures, the deal can provisionally apply from the beginning of the following month, unless they agree on a different start date.

EU Trade Commissioner Cecilia Malmström has suggested that this could happen “within weeks,” given the advanced state of play in the Canadian approval process.

The planned trade deal is expected to cut 98 percent of tariffs on trade in goods, with longer phase-out periods for some more sensitive products. Some agricultural goods will see the introduction of quotas, or have been excluded from the deal entirely.

CETA also is slated to see significant gains in public procurement market access, given that Canada will be opening up public contracts at all federal and sub-federal level for bidding from European companies. Proponents have also lauded the improvements in services market access, among various other provisions.

"We have done our work," Malmström said. "We don't see any delays with this."

Areas excluded from the provisional application of CETA include investment protection, such as the new investment court system, among other provisions that are not under exclusive EU competence.

Once all EU member states have completed their internal ratification procedures, which is expected to take years and in some cases will require the approval of regional legislatures, CETA will fully enter into force. Latvia is the first member state to have already done so. (See Bridges Weekly, 2 March 2017)

Malmström: Sustainable development enforcement terms to see review

Speaking at the European Economic and Social Committee Plenary Session in Brussels on 29 March, Malmström attested to the progressive nature of the accord, stating how the legally binding and enforceable commitments on areas such as the environment and labour rights will ensure that “trade is not at the expense of sustainable development.”

The EU trade chief cited the agreement’s environmental and labour standards as among its strong attributes, as well as fair trade, corporate social responsibility, sustainable fisheries, and forestry and animal welfare. She also highlighted the changes to investor-state dispute settlement under the investment court system, an area which continues to draw public scrutiny. (See Bridges Weekly, 3 March 2016)

Furthermore, she noted that the Commission will also begin reviewing CETA’s provisions for enforcing the sustainable development terms of the accord, though did not elaborate further in her prepared remarks.

In a speech to the Citizens' Dialogue at the University of Zagreb a day earlier, the EU Commissioner stated how CETA “is the most ambitious and progressive we (Europe) have ever made with any partner.”

“CETA is just one trade agreement. I hope it can be a template for sustainable, responsible trade that we can take to the world,” she added, while referring to various other trade deals that the EU is currently negotiating or plans to begin with partners across the globe. (See Bridges Weekly, 9 March 2017)

French court review

Meanwhile in France, some French parliamentarians have raised concerns that CETA will likely come into provisional effect before the country’s Constitutional Court has ruled on certain legal questions. The lawmakers involved, which reportedly number over 100, have particularly raised questions over what the deal’s investor protections mean for national sovereignty.

The French Constitutional Court was expected to rule on the constitutional value of CETA earlier this year, but has since pushed back the decision. The delay is reportedly the result of a heavy caseload, particularly in light of the French electoral context.

ICTSD reporting; “'We are ready': Canada-Europe trade deal set to kick in, mostly, by July 1,” CBC NEWS, 27 March 2017; “French attempts to delay CETA brushed aside,” EURACTIV, 31 March 2017; “Brussels faces fresh crisis over CETA as 100 French MPs take EU-Canada trade deal to court,” EXPRESS, 22 February 2017.

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