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).
European Parliament President Antonio Tajani welcomed today’s plenary vote on the EU-Canada Comprehensive Economic and Trade Agreement (CETA) and Strategic Partnership Agreement with Canada.
President Tajani stated: “This is a good agreement for our citizens. It will create new jobs and stimulate growth benefitting our entrepreneurs and consumers, while taking on board their concerns. It guarantees that the EU’s high health, environmental and labour standards will be protected.
By eliminating tariffs, regulatory and administrative barriers, as well as opening up public procurement markets, it creates opportunities - mainly for SMEs - making them more competitive. The entire real economy, including investment, manufacturing, services, e-commerce, agriculture and fishery, will also stand to benefit considerably from the agreement."
— S&D Group (@TheProgressives) February 15, 2017
EuroCommerce Director-General Christian Verschueren said: “Today’s vote is an important contribution to the creation of badly-needed growth and jobs in Europe. Especially at a time of political uncertainty we need an approach that ensures a sound international trading environment. CETA is a good deal both for European companies and European consumers.”
"CETA raises serious questions to the protection of our online rights and freedoms. These concerns have been sadly ignored. We now turn to the EU Member States to stand up for the interest of their citizens by rejecting CETA", said Maryant Fernández Pérez, Senior Policy Advisor at European Digital Rights (EDRi).
Greenpeace EU trade policy adviser Shira Stanton said: “Despite today’s vote, the ratification of CETA by all of Europe’s parliaments is still the most unlikely outcome. But the disconnect between MEPs and public concerns over living standards, public health and the environment is another blow to the EU, just when its principles of solidarity and cooperation are most needed.”
“Millions are taking to the streets on both sides of the Atlantic against a rollback of social and environmental rights. Instead of standing up for justice and democracy, too many politicians continue to hand privileges to multinational corporations. Politicians in Europe and elsewhere – especially those who call themselves progressive – should put the public interest before corporate profits.”
Fabian Flues, Trade Campaigner for Friends of the Earth Europe said: “This trade deal is a backward step in dealing with some of the world’s most pressing issues. It is a deal that puts profit before people by giving unacceptable rights to corporations to sue our governments for billions. Instead of helping to address the growing inequality, runaway climate change and the over-exploitation of people and natural resource, CETA will make it even harder to tackle them.”
Jan Willem Goudriaan, General Secretary of the European Public Services Union said: “Workers and those on low incomes do not see the benefits of these deals, and nor do many municipalities, farmers, consumer and environmental groups or small businesses. The fight goes on not only at the national level to block the ratification but also across the EU to shape a new, progressive trade agenda that protects and promotes public services and puts people and planet before corporate power and profit.”