The CETA treaty, finally signed by the EU and Canada on October 30th 2016, has just been backed by the European Parliament’s international trade committee. More on the controversial trade deal that has been dividing Europe in recent months.

What is CETA?

The EU-Canada Comprehensive Economic and Trade Agreement is a bilateral free trade and investment pact between the European Union and its twelfth most important trading partner, Canada. It is meant to foster employment and to boost competitiveness in the EU through the reduction of tariff and non-tariff barriers between the EU and Canada. Indeed, CETA will remove customs duties and open-up the services market as well as public contracts for European and Canadian companies. The agreement also provides a harmonization of standards and transfers of expertise and technology in order to protect EU innovations and traditional products.

Negotiations over CETA have been conducted by the European Commission and the Canadian government between 2009 and 2014. The agreement and its provisional application were adopted by the Commission in July 2016, so that the Commission could formally propose the signature and conclusion of the EU-Canada deal to the Council of the EU. The treaty was meant to be signed by the EU’s twenty-eight members on October 27th 2016. Yet, some protests in Europe caused the signature to be delayed.

In the media spotlight for two turbulent weeks

Indeed the treaty required an unanimous agreement from the twenty-eight EU member states to be signed by the Commission. It therefore needed to be ratified not only by the twenty-eight national parliaments but also by regional parliaments in federal states such as Belgium. However, the Walloon parliament refused to endorse CETA by a large majority on October 14th 2016 and thus blocked the whole ratification process. In response, the European Commission proposed a « joint interpretative instrument » aimed at clarifying some issues raised by the French-speaking Belgian region; the socialist head of Wallonia’s government Paul Magnette considered nevertheless that « progress had been made but […] was not sufficient ». On October 24th, Belgium Prime Minister Charles Michel admitted that Belgium was not able to sign off CETA insofar as Wallonia was still refusing to give the federal government the go-ahead to back the agreement. As a consequence, the EU-Canada summit which was due to take place on October 27th was cancelled.

Wallonia, among others, feared that the agreement would threaten its farmers. But above all, the region was opposing the proposed « Investors-State Dispute Settlement » (ISDS) mechanism which would allow private corporations to legally challenge national governments for alleged discriminatory practice. A compromise was finally struck between Belgian national and regional governments on October 27th. The intra-Belgian agreement essentially grants any national or regional parliament within Europe the ability to veto ISDS at a later stage. Moreover, it guarantees that the mechanism won’t be implemented during the period of the provisional application of the treaty and calls for its review by the European Court of Justice.

The agreement was endorsed by Belgian regional parliaments on October 28th and was then approved by EU member states through a written procedure, so that the CETA treaty could be officially signed on the 30th.

Signed. Backed by the EP’s committee months later. What then?

CETA can partially come into force as soon as the European and Canadian Parliaments back it. The EP’s international trade committee endorsed the deal on January 24th 2017 — with 25 votes in favour, 15 against, and one abstention. A vote on the report is now scheduled for February. However, the agreement still needs to be ratified by the thirty-eight national and regional parliaments in Europe to be fully implemented – a process that could take years.

Moïra TOURNEUR

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