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Five major obstacles to the ratification & implementation of CETA

Prime Minister Justin Trudeau and European Union leaders signed the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) on Sunday, but signing and ratification are two very different things. The agreement still faces an uphill ratification battle that could be played out over the next five years.

1 – A Belgian region could scrap it during provisional application

The Globe and Mail reports, “[It has] emerged [that CETA] could be scrapped at any time before final ratification… Final ratification is still required by the European Parliament and the legislatures in each EU member country… The EU and Belgium have now agreed that any one of Belgium’s regions can scrap CETA at any time before the final ratification vote if MPs don’t believe CETA is working… That would effectively kill the treaty because it would mean Belgium couldn’t ratify it.”

In fact, any country could scrap CETA during the provisional application period. Beyond Belgium, there are indications that CETA could be rejected by Lithuania, Italy and Austria. There will also be a referendum in the Netherlands that is likely to produce a strong ‘no to CETA’ vote.

2 – European Court of Justice ruling on ICS

The Globe and Mail also reports, “The fate of its key dispute resolution system remains in limbo. …Much of the opposition to CETA surrounds the treaty’s controversial dispute resolution system… [The Investment Court System] will not take effect provisionally and it will have to be approved by each EU member before it comes into force. Belgium has also asked the European Court of Justice to review the ICS proposal. …The EU and Belgium have now agreed that any one of Belgium’s regions can scrap CETA [if] ICS doesn’t meet ECJ standards. …Olga Zrihen, an MP in the Socialist government in Wallonia, said the Walloon parliament won’t back CETA without changes to the ICS.”

A further ruling from the German constitutional court is also expected at some point over the next three years. That court has already ruled against the provisional application of the investment court system.

3 – Regulatory harmonization on beef

The Canadian Press reports, “Questions over the resolution of outstanding technical barriers caused the Canadian Meat Council to be cautious in its praise for the deal. Spokesman Ron Davidson says one major barrier involves the Canadian use of anti-microbials like citric acid on beef. In Canada and the U.S., he says anti-microbials are used to ensure the product is safe for consumers. But in Europe, he said fewer anti-microbials are used. …’So, it sets up two different systems.’ …The Canadian Agri-Food Trade Alliance and the Canadian Cattlemen’s Association also noted that the technical barriers would need to be resolved.”

4 – Compensation for dairy farmers

Global News reports, “Under [CETA], EU cheesemakers will be allowed to sell 30,000 tonnes of cheese in Canada, more than doubling the current 13,000 tonnes.” iPolitics adds, “Dairy Farmers of Canada has estimated those concessions will cost the dairy industry $300 million in market losses. In October 2015, the Conservatives promised Canadian dairy, egg and poultry farmers $4.3 billion in compensation over 15-years funding, to cover concessions made on supply management under CETA and the Trans Pacific Partnership [but the Liberal government has not made a similar promise]. …Canadian dairy farmers have repeatedly insisted a compensation plan must be in place before the deal takes effect.”

5 – Provincial approval in Canada

And CTV reports, “Canada’s newly minted trade pact with the European Union could face significant hurdles at home… The road to full ratification could prove to be an uphill climb, said one expert. …International relations Professor Elliot Tepper said provincial governments have quietly gained powerful leverage over Ottawa now that the deal has been signed — the question is will they choose to use it. ‘You can take your pick which of our provinces might have some grievances they’d like to have looked at prior to signing on’.” CBC adds, “Newfoundland and Labrador Premier Paul Davis made his province’s support of CETA contingent on the federal government delivering a fishery fund. Local seafood processing requirements, which can protect jobs, run counter to the trade deal negotiated with the EU.”

The CBC has noted, “Canadian MPs will vote too [but] the responsibility for ratifying treaties rests with the executive: Trudeau’s cabinet. Trade Minister Chrystia Freeland is expected to introduce an implementation bill before the end of the year to change laws affected by the agreement. Because CETA crosses into provincial jurisdictions (opening up municipal procurement, for example), provincial legislation needs to pass too. Provinces negotiated CETA’s gives and takes alongside the federal negotiators. They’ve already signed off — no one expects any Wallonia-like standoffs.”

We’ll see.