Written by Krisztina Binder and Wilhelm Schöllmann,
The EU-Canada negotiations on a Comprehensive Economic and Trade Agreement (CETA) began in May 2009 and were concluded in September 2014. For the EU, CETA represents the first comprehensive economic agreement with a highly industrialised Western economy.
What’s in the text?
The agreement’s overall aim is to increase flows of goods, services and investment, to the benefit of both partners. Except for a few sensitive agricultural products, the agreement would remove practically all tariffs on goods exchanged between the two partners. Under the agreement, Canada would substantially open up its public procurement, thereby eliminating a major asymmetry in access to each party’s public procurement markets. The EU also succeeded in securing protection for a large number of European Geographical Indications (GIs) on the Canadian market. Furthermore, provisions on sustainable development seek to ensure that trade and investment supports, rather than damages, environmental protection and social development.
Signature of the agreement
The EU and Canada signed CETA on 30 October 2016, after long discussions. In a total of 38 statements and declarations, Member States, the European Commission and Council explain the basis on which they have signed CETA. Moreover, the Joint Interpretive Instrument declares the negotiating parties’ understanding that CETA does not, among other things, limit countries’ rights to regulate, or endanger public services, workers’ rights, and environmental protection.
As CETA is a ‘mixed agreement’ it needs to be ratified by both the EU and (all) Member States to enter into force permanently. The Council decided in favour of provisional application, on the condition that the European Parliament gives prior consent. Provisional application can only cover those parts of the agreement falling under EU competence. The Council therefore excluded from provisional application, among other parts, investment protection and the Investment Court System, as well as certain elements of the chapter on financial services. The Council envisages provisional application as of 1 March 2017. It states that ‘if the ratification of CETA fails permanently and definitively because of a ruling of a constitutional court, or following the completion of other constitutional processes and formal notification by the government of the concerned state, provisional application must be and will be terminated’.
The Council can conclude the agreement on behalf of the EU only after Parliament gives its consent. The European Parliament has launched the consent procedure, with Artis Pabriks (EPP, Latvia) as rapporteur. On 24 January 2017, the lead Committee on International Trade (INTA) voted in favour of the EP consenting to CETA. The vote in plenary will take place in Strasbourg on 15 February 2017.
Total trade in goods between Canada and the EU grew to €64 billion in 2015, making Canada the EU’s eleventh most important trading partner. In turn, the EU is Canada’s second most important trading partner, after the USA. With investments totalling €165.9 billion (2014), Canada is the third largest investor in the European Union. European foreign investment in Canada reached €274.7 billion, making this country the EU’s fourth most important investment destination.
- International Agreements in Progress: Comprehensive Economic and Trade Agreement (CETA) with Canada, Wilhelm Schöllmann
- CETA and Public Services, Laura Puccio and Wilhelm Schöllmann
- CETA: Investment and the right to regulate, Laura Puccio
- Trade and Sustainable Development Chapters in CETA, Laura Puccio and Krisztina Binder
- Agriculture in the EU-Canada Comprehensive Economic and Trade Agreement (CETA), Francesco Tropea and Peter Devuyst
- Is CETA a mixed agreement?, Wilhelm Schöllmann
- Canada: Economic Indicators and Trade with the EU, GlobalStat and EPRS infographic, Whilhelm Schöllmann and Giulio Sabbati in cooperation with Laura Bartolini