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Warnings that CETA could be provisionally applied

Maude Barlow and Angela Merkel

Council of Canadians chairperson Maude Barlow and German chancellor Angela Merkel, April 2015.

The French daily newspaper Le Monde reports that the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and its controversial Investor-State Dispute Settlement (ISDS) provision could be “provisionally” applied even without ratification by EU member state parliaments.

If CETA were to be considered “non-mixed” (exclusively within the “competency” or jurisdiction of the European Union), then the deal could be ratified through a process in which:

  • The Council of the European Union (where government ministers from each EU country meet to discuss, amend and adopt laws, and coordinate policies) votes in favour of the deal (which in practice would require at least 55 per cent of the states representing 65 per cent of the European population);


  • A majority vote in the European Parliament.

That said, in February 2014, EU Trade Insights reported that the Council of the European Union would not sign CETA if it is presented as an “EU-only” (non-mixed) agreement. That’s because under the 2009 Lisbon Treaty (which forms the constitutional basis for the European Union), agreements with provisions related to investment protection are recognized as a “shared competence” between the European Union and its member states. But it has also been argued that if the European Commission recommends that the agreement be considered as an “EU-only” agreement, it would require a unanimous vote in the Council of the European Union to overturn that recommendation.

But if CETA were to be considered a “mixed” agreement (meaning aspects of the agreement involve the “competency” or jurisdiction of EU member states), then the process would likely be as follows:

  • The unanimous approval of the Council of the European Union (again, this is the body that represents EU member states at the European Parliament);


  • A majority vote in the European Parliament;


  • Ratification by all 28 EU member states (either by a vote in Parliament or by referendum).

The European Commission (the “executive” of the European Union that negotiated CETA) has stated that CETA is a “non-mixed” agreement (favouring the simpler ratification process), while most European Union member state governments (including Germany and France, the two largest economies in the EU) say it is a “mixed” agreement (requiring the fuller ratification process). The decision on “mixed” versus “non-mixed” will be a critical turning point in the campaign to stop the ratification of CETA. In that CETA is expected to go to the Council of the European Union this May, a key development on CETA could come within weeks.

Le Monde then highlights 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.” Indeed, CETA has the following two provisions:

  • Article X.06-3(a) says: “This Agreement shall be provisionally applied from the first day of the month following the date on which the parties have notified each other that their respective relevant procedures have been completed.”


  • Article X.07-4 says: “If the provisional application of this Agreement is terminated and it does not enter into force, a claim may be submitted pursuant to the provisions of this Agreement, regarding any matter arising during the period of the provisional application of this Agreement, pursuant to the rules and procedures established in this Agreement, and provided no more than three (3) years have elapsed since the date of termination of the provisional application.”

Le Monde concludes, “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, though criticized for the threat it poses to the right of governments to regulate, could still be applied for three years.”

It should also be highlighted that the Canadian government has reportedly rejected the Investment Court System (ICS) ‘reform’ proposed by the European Commission as a way to circumvent the high level of opposition in the European Parliament to the ISDS provision in CETA. But according to Canada’s chief CETA negotiator, Canada and the EU are “clarifying some provisions” in CETA including “the obligations to ensure that the government’s right to regulate is not interfered with with respect to investor claims”, the process relating to “the selection of arbitrators” and “an appellate mechanism”.

Presumably the Trudeau government is thinking that tweaking the right to regulate, the selection of arbitrators and an appeals process will be sufficient to quell the opposition against ISDS in the European Parliament. Council of Canadians chairperson Maude Barlow will be back in Europe this April to make the case that these tweaks are not sufficient and that MEPs should reject CETA.

Further reading
Trudeau appears to choose to stick with ISDS in CETA (Feb. 16, 2016)
Majority of MEPs may oppose Canada-EU ‘trade’ deal (Aug. 28, 2014)