The EU-Canada trade agreement (CETA): a blueprint for future trade negotiations?
The Comprehensive Economic and Trade Agreement — better known as CETA — is an ambitious free trade agreement negotiated by Canada and the European Union. The negotiations, launched in 2009, were formally concluded in Ottawa on 26 October 2014. On 15 February 2017, the European Parliament has given its consent on CETA. On the EU side, since this Agreement has been declared of “mixed” competence by the European Commission, it will be provisional applied as from April 2017 and needs to be ratified by the EU Member States.
According to its proponents, CETA is the most modern free trade agreement ever negotiated and it will constitute a blueprint for future trade deals, while its opponents argue that it will be hugely detrimental for SMEs (which are the backbone of the EU economy) and that it will lower labour, social and environmental standards.
CETA: structure, key advantages and criticism
CETA consists of 30 chapters (and their Annexes) which address a wide range of topics: market access, public procurement, services, intellectual property rights (IPRs), protection of geographical indications (GIs), rules of origin, mutual recognition of professional qualications, labour and enviromental standards. On some politically sensitive issues — e.g. on market access for agricultural products — both Canada and the EU maintained some degree of protection (i.e. quotas or reservations). Below, a summary of the key advantages of CETA:
Market access: the EU and Canada will open their respective markets to each other’s goods and services. For goods, some quotas are maintained (e.g. in the dairy sector) by both Parties. For services, although Canada and the EU widely liberalize their markets following a “negative list” approach, the Annexes to the services Chapters enlist the reservations that both Parties will maintain.
Protection of geographical indications (GIs): Mortadella di Bologna, Feta, Camambert, Bratwurste and Parmiggiano Reggiano are among the 145 EU products which will be granted protection. Even if, for some of them, Canada and the EU reached a compromise solution, CETA represents, nonetheless, an unprecedented outcome for EU producers.
Public procurement: both Parties will open their respective public procurement markets; some limitations are maintained and enlisted in the Annexes. Canada will liberalise its public procurement market at all levels (national, regional and local).
Investment: this Chapter is one of the most innovative of CETA since it contains clear investment protection standards and reference to the Governments right to regulate as well as provisions for the establishment of an investment court system (ICS).
Mutual recognition of professional qualifications: the EU and Canada established a common framework for the mutual recognition of professional qualifications. This will allow service suppliers of either Party to practice professional activities in the host jurisdiction, in accordance with the terms and conditions specified in a previously negotiated Mutual Recognition Agreement (MRA).
Environmental, social and labour standards: the European Union and Canada reaffirm their commitments to sustainable development. In this regard, CETA contains provisions on cooperation in international fora, exchange of information and of best practices, consultations, transparency and public awareness. Both parties will actively involve representatives of civil society (e.g. trade unions, NGOs, business and labour organizations, environmental groups). Canada and the EU will also promote the implementation and the enforcement of international standards (e.g. the ILO Conventions and international environmental agreements).
As mentioned in my introduction, opponents of CETA have put numerous arguments against the Agreement. In the paragraphs below, some of the arguments (in italics) against CETA, followed by my counter-argument (in bold italics) based on my personal knowledge of the Agreement:
Investment Court System (ICS) will be exploited by multinationals corporations to challenge States’ decisions. CETA clearly defines what is considered an “investment”, the investment protection standards and the limited scope of investment disputes. With regard to the court, CETA defines its institutional set-up, the criteria for the selection of judges and establishes clear and detailed rules of procedure for the conduct of the proceedings, on transparency and ethics. The Governments’ right to regulate in the public interest is safeguarded.
CETA will force governments to privatize public services. The Parties have enlisted the most sensitive sectors (i.e. public services) under “Annex II” of the Chapter on Services. Under this Annex, Parties reserved the right to inroduce new and even more stringent reservations. There is no provision in CETA which states that public services have to be privatized.
The EU will import from Canada meat treated with hormones. This is one of the most used arguements against CETA. Canada and the EU signed a Memorandum of Understanding on 22 March 2011, thus ending a long dispute before the WTO. The EC-Hormones case was initiated in June 1996 when Canada asked the EU to join consultations on the EU measures prohibiting the placing on the European market of meat and meat products treated with hormones. Under the Memorandum, the EU will import high quality beef not treated with certain growth-promoting hormones. CETA also contains a Chapter on Sanitary and Phytosanitary measures whose main objectives are to protect human life and health while facilitating trade, to ensure that the Parties’ SPS measures do not create unjustified barriers to trade and the further implementation of the WTO SPS Agreement.
I personally do consider CETA to be an ambitious, innovative and balanced agreement which will boost EU and Canada economies and beneficial both to producers and consumers. In my opinion, it may as well be a blueprint for future trade negotiations. I reckon that EU Member States should ratify CETA, in a time of rising protectionism and anti-globalisation movements as well as to safeguard the credibility of the EU trade policy.
