EU-Canada CETA deal: signed but questionable

Posted on the 9th November 2016 by Ieva


The controversial and long-delayed EU-Canada trade deal has finally been signed after seven years of negotiation and several break-downs. Yet, the wide-spread antagonism in Europe, which threatens to undermine the agreement, remains.

The CETA (Comprehensive Economic and Trade Agreement) treaty was signed in Brussels on Sunday, 30th October, by Canadian Prime Minister Justin Trudeau and top EU officials. Under this agreement, Canada and the EU will eliminate 98% of tariffs. The move is estimated to generate an annual 20% increase in trade between the two parties, which would boost the EU economy by £10.9bn and Canada’s by £7.4bn a year. CETA is praised as an innovative trade deal because it goes further than simply ending protectionism. It includes clauses on intellectual property rights, government procurement obligations, or the right of companies to be compensated for the investment-damaging governmental decisions.

As good as it sounds, the future of CETA still looks gloomy. Although signed by the Canadian and EU leaders, the treaty needs the approval of at least 38 national and regional European parliaments to take the full force but with the current opposition this could never happen.

CETA is seen as the sister deal of the EU-US TTIP (Transatlantic Trade and Investment Partnership) agreement and is subject to similar protest movements. Both deals are criticized for empowering big businesses with the law-making rights handed to them by extensive deregulation and liberalisation. Not surprisingly, nearly 3.5 million Europeans have expressed their opposition to these deals in a petition campaign.

The EU-Canada trade agreement was first frozen and almost derailed by the internal politics of Belgium. Under the country’s constitution, each regional government must back any international deal before the federal government can ratify it. This provoked a rejection of CETA treaty by Wallonia, a tiny Belgian region, which feared an increased Canadian competition to the local farmers. At least permanently, Belgian national government was able to pull the headwinds around.

Lately, CETA was attacked by the protestors in the Netherlands who, as most of the opposition, believed that the deal was designed invariably in favour of the multinational companies. Activists in the Netherlands have already gathered almost 200,000 out of the constitutionally required 300,000 signatures to trigger a referendum on the free trade deal with Canada. If referendum takes place and closes in defeat, this would build further obstacles to the ratification of CETA.

Despite all this uncertainty, what could CETA possibly mean for post-Brexit Britain? Britain’s International Trade Secretary Liam Fox is keen to secure EU-Canada deal before the Article 50 is triggered in hopes that it will stay in place after Brexit. However, it is likely that with the ‘hard Brexit’ in place Britain will lose access to the EU trade agreements, which would undoubtedly involve CETA and Canada. Nonetheless, CETA could serve as a model for the future EU-UK trade deal as it does not include clauses on the EU-style free movement of labour, one of the main concerns of the pro-Brexit leaders. Still, the fact that getting CETA together took seven years should alarm the UK leaders, for whom negotiating trade deals with the EU could be just as lengthy.

Written by Ieva Zvinakyte



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