EU members unsure how to apply CETA, 2 months from signing
Ceremony planned for October, but EU members disagree on what should come into effect, when
The signing ceremony for Canada's trade deal with the European Union may be planned for October in Brussels, but don't book a non-refundable ticket just yet.
Leaked meeting notes posted earlier this month by online news site Politico Europe suggest that as recently as July 15, countries couldn't agree on what parts of the agreement should apply when.
Jean-Luc Demarty, director-general for trade, chaired the meeting of the European Commission's trade policy committee summarized in the unofficial translation. Representatives from member states were present, identified only by country.
The notes reveal at least six countries still suggesting amendments or reserving the right to request further changes to the Comprehensive Economic Trade Agreement (CETA).
What was supposed to be the final version of the text was published last winter, after a legal scrub that took several years.
The notes say countries were told Canada wouldn't sign unless Europe agrees to apply measures provisionally, as final steps to complete ratification drag out.
While ratifying CETA in Canada should be fairly simple — Justin Trudeau's Liberal government can pass an implementation bill easily with its majority, and all provinces and territories have committed to do likewise — in Europe it's anything but.
Some won't commit
The next step for the EU is the approval of the European Council. The heads of all 28 member states are set to meet Oct. 20-21. If CETA's approved, Trudeau would head to Brussels for a signing ceremony the following week.
But the leaked notes suggest at least three countries aren't ready to sign.
Belgium, facing stiff opposition to CETA in its Walloon region, could not take a position.
Romania and Bulgaria said unresolved visa issues left them unable to support signing.
Firm opposition at the council — which takes decisions by consensus — could derail the signing.
But officials suggest countries who don't feel they can endorse may abstain, rather than block it.
"The EU has never had a situation where a member state has rejected a trade agreement once it's finalized," a senior official said earlier this summer.
Provisional application contentious
After the official signing, the European Parliament must vote, likely in late 2016 or early 2017.
Passage is not a given. International Trade Minister Chrystia Freeland has been lobbying hard in European capitals.
The European Commission decided July 5 that CETA is a "mixed" agreement, now requiring a third stage for ratification. Because individual countries may retain jurisdiction over some areas, votes in each state's legislature are required to ratify the full deal.
Pleased to discuss our landmark agreement <a href="https://twitter.com/hashtag/CETA?src=hash">#CETA</a> w <a href="https://twitter.com/MarieAnnConinsx">@MarieAnnConinsx</a> + other <a href="https://twitter.com/hashtag/EU?src=hash">#EU</a> Ambassadors <a href="https://twitter.com/EUinCanada">@EUinCanada</a> –Min Freeland <a href="https://t.co/6EFyFzVOTW">pic.twitter.com/6EFyFzVOTW</a>—@CanadaTrade
The leaked notes said the Commission would speak with Canada about changes to Article 30.8 and 30.9, clauses setting out how CETA takes effect: the transition from previous trade agreements, and how it could be terminated.
But Canada has not yet received notice the EU wants to alter the text. Further, Canadian officials do not believe changes are necessary, even after last month's decision.
Following a precedent set by other agreements, Freeland has said 90 per cent of the deal could apply provisionally once the EU Parliament votes.
The leaked notes suggest varying views in Europe on this.
At a briefing July 6, Canadian officials said the EU has to work out what parts will be provisionally applied — Canada doesn't want to interfere with that internal process and intends to mirror what the EU decides.
But in the leaked July 15 meeting notes, the European Commission said Canada would have a say.
What's at issue?
Canadian officials said only a "fairly narrow list" of measures need to wait for each member state's ratification, based on their reading of European jurisdictions:
- Transportation regulations, such as maritime transport rules around licensing third-party vessels.
- Mutual recognition of professional credentials.
- Some labour, environmental and fishing provisions.
- Investment provisions, including the investor-state dispute settlement (ISDS) process revised last winter.
In the European notes, there's agreement the foreign direct investment rules and ISDS chapters need to wait. Germany advocated for its right to vote on the new investor court system it championed to help overcome political opposition at home.
But the European Commission said it didn't want to hold back the transport sector changes because they are advantageous (an "offensive interest.")
The notes say Canada wants those delayed. Austria and France also favour holding back. The legal adviser at the meeting said countries have to make a political decision on exercising their jurisdiction.
The EU notes describe delaying the sustainable development chapter as "problematic for the EU's credibility." But Austria and France advocated excluding unspecified parts from provisional application.
The meeting noted Canada hasn't yet adopted two International Labour Organization (ILO) standards (on collective bargaining and minimum wages.) That's "expected soon."
With my dear friend <a href="https://twitter.com/MalmstromEU">@MalmstromEU</a>! We remain committed to <a href="https://twitter.com/hashtag/CETA?src=hash">#CETA</a> + opportunities it brings for 🇨🇦 & 🇪🇺 – Min Freeland <a href="https://t.co/uttbOhKEWZ">pic.twitter.com/uttbOhKEWZ</a>—@CanadaTrade
Austria favoured excluding culture subsidies from provisional application.
France wanted to hold back the mediation chapter, as well as the criminal sanctions in the intellectual property chapter.
Asked to confirm the authenticity of the notes posted online, a spokeswoman for the European delegation in Ottawa said they won't comment on leaked documents.
With populist anti-trade movements building support worldwide, CETA is one of several deals struggling for political support.
Its ratification comes amid the turmoil of the United Kingdom's recent referendum vote to leave the EU. The British are strong advocates of free trade with Canada.
The notes quote Demarty saying CETA is a "litmus test" for EU trade policy. An inability to ratify it, he continued, would be a big credibility problem for the EU: it would be "close to death."
Canada and <a href="https://twitter.com/hashtag/UnitedKingdom?src=hash">#UnitedKingdom</a> share history, values – and a bright future together <a href="https://twitter.com/LiamFoxMP">@LiamFoxMP</a>– Min Freeland <a href="https://t.co/iMyUyz0Rcz">pic.twitter.com/iMyUyz0Rcz</a>—@CanadaTrade