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European Parliament CETA Ratification – Helped by Trump?

February 15th, 2017 - by Amy Verdun, University of Victoria

Today the European Parliament approved the Comprehensive Economic and Trade Agreement (CETA). There were 695 Members of the European Parliament (MEPs) present of which 408 voted in favour, 254 against and 33 did not vote. It brings the completion of the ratification process another step closer. The agreement enables the Europeans and Canadians to trade more freely with one another as well as other forms of deeper economic cooperation. The ratification of the CETA by the European Parliament was not always a given. Some members of the European Parliament worry about the dispute settlement system that has been created together with this agreement. A new tribunal ‘the Investment Court System’ that has been put in place to deal with investor-state disputes. Critics worry that only investors will benefit from this court but that groups of consumers, environmentalists or workers cannot bring cases to it. These concerns were leading numerous voices in Europe and Canada to be sceptical about the astuteness of ratifying CETA.

It seems that with a change in global stance towards free trade, following the election of Donald Trump and the subsequent trials and tribulations of the first few weeks of the Trump Administration may have put the partnership of the EU and Canadian in a more favourable light. In the past, some MEPs were concerned about whether CETA would be a template for the Transatlantic Trade and Investment Partnership (TTIP – the EU-US trade agreement). The first thing Trump has done, however, upon becoming the 45th president of the US, is to scrap the TTIP. Thus, those who would be worried about large US, litigious enterprises, would not need to be concerned about how CETA might pave the way for TTIP (at least not in the short-run). Furthermore, if the CETA agreement fails, it would make it more difficult for the EU to sign trade agreements with other countries.

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CETA approved by the European Parliament - what next?

February 15, 2017 - by Patrick Leblond, University of Ottawa

Today, the European Parliament approved the Comprehensive Economic and Trade Agreement (CETA) with Canada. Once the Canadian parliament has had a chance to have its say on the agreement, which could happen in the coming weeks, CETA will come into effect sometime in the summer. However, only about 90-95% of the agreement will come into effect since CETA will only be applying provisionally in the EU pending ratification by the national parliaments of the EU’s member states, given that CETA is what Europeans call a “mixed agreement” (i.e. It involved both EU-level as well as national-level competencies). CETA's coming into force is good news for the Canadian economy since it will immediately eliminate tariffs on most goods traded between Canada and the EU. Canadian firms will not only be able to export their goods to the EU tariff free but import production inputs at a cheaper price. Another important feature about CETA is that it will also give Canadian firms easier access to the EU’s vast public procurement market. Given the protectionist stance adopted by the Trump administration and the apparent failure of the EU-US Transatlantic Trade and Investment Partnership, European firms may see Canada has a good base for doing business in North America, which should help increase investments from Europe into the Canadian economy. Finally, CETA is much more than eliminating tariffs. It is also very much about Canada-EU cooperation to remove so-called “beyond-the-border” barriers to trade and investment that are caused by differing regulations, standards, rules and processes. This collaborative work can only really begin once CETA comes into force. This means that Canadian governments (federal and provincial) and their EU counterparts have a lot of work to do in the coming months and years to reduce, if not remove, these non-tariff barriers (for details on this work, see https://www.cigionline.org/publications/making-most-ceta-complete-and-effective-implementation-key-realizing-agreements-full-0).

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