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CETA to be considered a “mixed” agreement, now more vulnerable to defeat

It would appear that the European Commission, the executive branch of the European Union, will back down from its earlier statements and present the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) as a “mixed” agreement rather than an “EU-only” agreement.

This is a dramatic turn of events and good news for opponents of the deal in that it prolongs the ratification process (one report suggests it could now take as long as four years to ratify) and makes it much more difficult for CETA to be passed given the growing number of European jurisdictions with deep concerns about the deal that will now be able to vote on it.

The Financial Post reports, “Jean-Claude Juncker, the European Commission president, is preparing to ditch contentious plans to fast-track approval of a trade deal with Canada, in an eleventh-hour political retreat that followed staunch criticism from some European capitals. To the dismay of Germany and France, Mr Juncker had tried to speed up the formal adoption of the EU-Canada deal by having it approved by trade ministers and MEPs, without the need for 38 national parliaments, some of them regional, to sign it off. But in a nod to critics in Berlin, the commission is now planning to switch approach and declare the Canada deal a so-called ‘mixed agreement’ at a meeting of EU commissioners [today], said officials familiar with the discussions.”

So for CETA to be ratified, it would now likely require:

  • The unanimous approval of the Council of the European Union (this is the body that represents EU member states in Brussels);

  • A majority vote in the European Parliament;

  • Ratification by all 28 EU member states, or now reportedly 38 jurisdictions (either by a vote in their parliaments or by referendum).

If this is the case, this would be a setback for the ‘free trade’ agenda being promoted by the Trudeau government. Canadian trade minister Chrystia Freeland had suggested that the ratification of CETA “is on a much faster track” than the United Kingdom invoking Article 50 to leave the European Union, which would be a two-year process.

The article highlights, “The Canada spat underlines how the mood on trade has soured across the bloc, making the political adoption of commission-brokered trade deals increasingly difficult, even in Germany, a traditional free trade champion. Brussels fears that, with protectionist sentiment rising, the laborious national ratification process could be the death knell of a deal that took five years to negotiate.”

One important concern to note, “The commission may recommend provisionally applying the EU-parts of the Canada deal while full ratification is pending.”

The French newspaper Le Monde has previously reported that even if CETA is deemed to be a “mixed” agreement, the deal could enter into force “provisionally” even before EU member state parliaments vote on it. It notes, “If EU ministers agreed at the signing of the CETA on its provisional application, it could come into effect the following month. Such a decision would have serious implications. Symbolically, first because it would send the message that European governments finally little regard for the views of parliamentarians and thus of European citizens strongly against the agreement.”

Currently, CETA is scheduled to be signed by European officials and Canadian prime minister Justin Trudeau on October 27. If the deal were to be provisionally applied, that would suggest that portions of CETA could take effect as soon as November 1, 2016. Le Monde has explained, “This means that even if MEPs rejected and buried CETA at the solemn vote expected in the second half of 2016, the arbitration mechanism in it [meaning the Investment Court System], though criticized for the threat it poses to the right of governments to regulate, could still be applied for three years.”

The Council of Canadians opposes the provisional application of CETA as a maneuver that disrespects the democratic process and calls on all parties to reject this option.

We have also been calling on the Trudeau government to pause in its headlong push to get CETA ratified. With the Brexit vote, Canada’s largest trading partner within the EU will likely be removed the equation. The UK is also the second largest economy in the EU. Given the benefits of CETA were calculated on the basis of the UK’s involvement in the deal – for example, the UK represents about 10 per cent of the beef sector Canada was hoping to gain with the deal (a major selling-point for the agreement) – we believe it only prudent to conduct a new cost-benefit analysis on CETA minus the UK.