After a heated debate in Parliament on Wednesday (15 February), MEPs have given the green light to the EU-Canada trade agreement, clearing the way for the deal to come into force provisionally this spring.
Expected to boost growth, and for every €1 billion in new exports to create 14.000 jobs, the Comprehensive Economic and Trade Agreement with Canada, also known as CETA, has been at the centre of a Europe-wide controversy, with many activists and lawmakers calling it a Trojan horse for multinationals to bend rules.
Backed by 408 MEPs and rejected by 254, with 33 abstentions, CETA will now face the hurdle of being ratified by the 28 member states. The ratification process varies from country to country, with some requesting approval in national parliaments.
After seven years of negotiations, and a bumpy final landing, the European Union and Canada signed the landmark trade deal in October, hoping to set the stage for future negotiations and liberal multilateralism
Facing staunch opposition, in recent weeks, Trade Commissioner Cecilia Malmström, said that CETA promotes “our values of free, fair and sustainable trade”.
“Nothing in the agreement undermines governments’ right to regulate in the public interest. Nothing in this agreement affects the safety of food we eat or products we buy. Nothing prevents governments from providing public services or bringing these services back to the public domain if they had been privatised. Nothing requires privatisation of water or healthcare. Nothing changes the prerogative of EU lawmakers to set EU rules under EU procedures,” she added in the European Parliament today, rebuffing critics.
Inspiring CETA: From lighthouse to coup d’état
In a debate that seemed to sway between real and alternative facts, MEPs recognised that sustainable globalisation and greater prosperity can only be achieved through an open world economy, rejecting protectionist pressure coming from the Trump government in the United States.
“We need to show that protectionism does not work, putting up barriers, building walls is not the answer,” said Malmström, slamming Italian Movimento Cinque Stelle MEP Stelle Tiziana Beghin (EFDD), who called CETA a coup d’état.
“That is going too far,” said Malmström, who insisted that efficient fair trade agreements with like-minded partners is the only answer.
Latvian centre-right Vienotība MEP Artis Pabriks (EPP), in charge of the report on CETA, called the agreement a lighthouse for trade. “We should not switch the light off,” he said.
What’s in the numbers?
The European Commission reckons that Canada will eliminate duties worth €400 million for goods originating in the EU, as of the first day of its implementation, and the figure is supposed to rise to more than €500 million after the transitional period.
80% of the 7000 companies trading with Canada are SMEs and the trade deal will reduce tariffs, cut red tape and create market access for them, the Commissioner thundered, responding to those that continued to repeat that the deal was designed to benefit multinationals.
The deal is expected to boost the EU economy by €12bn a year and Canada’s by C$12bn (€8.5 billion).
Mounting pressure from civil society combined with approaching elections in heavyweight member states – Germany, France and the Netherlands – have blurred the lines of support. Until the last minute activists lobbied MEPs trying to impede consensus within political groups.
But the voting results seem to indicate that the Social and Democrats (S&D), which was deeply divided, formed a united front. “The vote indicates that the S&D was not that split after all,” said Doru Frantescu from Brussels-based think tank Votewatch.
“For S&D, CETA is not a model, but it is a beginning of a change in trade policy in the world. We need to move forward with wisdom and prudence,” said Gianni Pittella, who leads the group.
— S&D Group (@TheProgressives) February 15, 2017
To respond to criticism, the Commission has included in CETA a review clause in the deal, which allows the chapter covering labour to be modified. The Joint Interpretative Instrument agreed on by Canada and the EU in October also permits governments to reinforce labour protections and take action against violations of labour law.
Critical issues are still pending pre-ratification, such as the contentious Investment Court System (ICS) and the protection of public services.
“We will use every avenue available to pursue our demands, in both the EU and Canada, including the European Parliament,” said Liina Carr, Confederal Secretary at the European Trade Union Confederation (ETUC).
CETA is expected to come into force provisionally this spring. However, following a decision by the 28 member states in the EU Council, provisional application will not apply to the following areas of CETA: investment protection (including the investment court or ICS), portfolio investment and related provisions from the financial services chapter.
“During the next phase: provisional application of CETA prior to national approval, trade unions will be watching to ensure workers’ interests are not harmed and investors’ profits do not take precedence while campaigning at national level for high standards of protection,” added Carr.
National ratification procedures can take several years. The EU-Korea FTA’s national ratification process took four-and-a-half years. The Singapore FTA has been on hold since 2014, pending an opinion of the ECJ expected in March 2017.
In some countries, citizens might succeed in reaching the quorum to call for a referendum.
The Dutch have twice voted down European Union initiatives in referendums, scuppering a proposed EU constitution in 2005 and in April throwing into disarray plans for closer EU relations with Ukraine.
Over the past year, activists have gathered hundreds of thousands of supporters who have pledged to petition for a referendum on CETA once the Dutch parliament has ratified it.
Prime Minister Justin Trudeau will fly all the way from Canada to address MEPs in Strasbourg tomorrow (16 February).