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EU Member States to Vote on Canada Trade Pact

06.07.2016 -

Amid the discussion over EU member states’ sovereign rights in the aftermath of the UK vote to leave the union (Brexit), the European Commission has decided on a cautious approach to ratification of the Comprehensive Economic and Trade Agreement with Canada, known under the acronym CETA. Rather than fast-tracking the agreement following its ratification by the European Parliament and the Council of EU member states or their trade representatives, it will be submitted to the national parliaments, and in some cases also regional parliaments of the currently 28 countries for their consultation and approval.

However, addressing concerns that the extended procedure could delay ratification for months if not years, Commission President Jean-Claude Juncker said the deal could begin to be provisionally applied following approval of the EU Council and the European Parliament.

Touting the pact’s value, the Commissions said “CETA will scrap almost all customs duties, saving EU firms hundreds of millions of euros per year in duty payments, thus also benefiting European consumers directly, by reducing prices and increasing choice of products imported from Canada.”

Besides cutting customs duties, it said, “CETA will help cut costs for EU firms, especially smaller ones, thanks to mutual recognition of so-called conformity assessment certificates for a wide range of products.” While allowing European and Canadian businesses to compete on a “truly level playing field,” the EU executive said, addressing critics, that “CETA also contains strong rules on protection of labour rights and the environment.”

Initial plans to fast-track the trade agreement met with opposition from advocacy groups similar to that directed at the Transatlantic Trade and Investment Partnership (TTIP) still being negotiated between the EU and the US.

The political leadership of France and Austria as well as Germany has also had reservations against Juncker’s original plan to bypass national parliaments. German Chancellor Angela Merkel said the lower house of the country’s parliament, Bundestag, should be consulted on this “highly political agreement.”

National parliaments in Hungary and Luxembourg also have demand consultation rights, and reports said Romania and Bulgaria want to make a deal contingent on a relaxation of visa rights for their citizens in Canada.

Complicating matters is an unresolved late 2014 request by the Commission itself to the EU Court of Justice on whether the Lisbon Treaty allows it the competence to sign and ratify a trade agreement with Singapore or whether member states must be consulted.

Commenting on the Commission’s decision to consult national parliaments on CETA, the German chemical industry association Verband der Chemischen Industrie (VCI) called on the German Bundestag to make a “clear commitment” to ratify the agreement without delay. Especially in the current situation after the Brexit referendum, “this is a way for the European Union to show to the world that the EU is a reliable trading partner and capable of acting,” it said.

The association noted also that “CETA would bring advantages to German chemical companies, such as easier market access, full elimination of industrial tariffs, access to the Canadian public procurement market and investor protection.”

While the Green faction in the European Parliament called the new rights awarded national governing bodies as regards CETA ratification a victory for civil society and for European democracy, the pressure group Friends of the Earth Europe and several of its allied organizations appealed to national parliaments to reject CETA outright.

Non-aligned critics said they thought involving national legislatures would slow the decision-making process within the EU and that the Commission’s hands would increasingly be tied.

Other commentators said the new procedure could have fatal ramifications for the passage of TTIP. Fears were equally expressed about the implications for a bilateral trade deal that would have to be negotiated between the EU and a post-Brexit UK.

The CETA agreement was planned to be signed at the end of October this year during a summit in Brussels with Canadian Prime Minister Justin Trudeau and implemented in 2017. This timetable now looks increasingly doubtful, most observers now believe.