CETA finally signed and sealed – but not yet delivered

CETA, the free trade deal between Canada and the EU, has finally been signed seven years after it was first proposed.

Canada and EU trade deal CETA finally agreed
Seven years after it was first mooted, the Comprehensive Economic and Trade Agreement (CETA) – the free trade deal between Canada and the European Union – was finally signed in Brussels on Sunday. Yet, as Prime Minister Justin Trudeau knows, the 1,600-page agreement remains far from a done deal and still requires approval of the European Parliament, the 28 national parliaments of EU states and, most problematic, several regional assemblies in Europe.

Trudeau, Juncker and Tusk

The signing of the agreement had already had to be postponed after Belgium's French-speaking region of Wallonia had demanded stronger safeguards on labour, environmental and consumer standards, and protection for Walloon farmers from Canadian imports. By Friday, Belgian Prime Minister Charles Michel said that, after marathon talks, an agreement had been reached on an addendum to the deal which addressed regional concerns. But the road to full ratification remains a long one, as Mr Trudeau acknowledged after Sunday's ceremony with Donald Tusk, president of the European Union, and European Commission head, Jean-Claude Juncker. "The work is only just beginning right now," Mr Trudeau said."The fact that, throughout, people were asking tough questions of a deal that will have a significant impact on our economies and, giving us the opportunity to demonstrate that that impact will be positive, is a good thing. That is what a democracy is: we need to have a whole chorus of different voices, able to share their concerns."Canadians and Europeans share the understanding that in order for real and meaningful economic growth, we need to create more good, well-paying jobs for our citizens. Progressive trade agreements, like the one signed today, will do just that."

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Mr Tusk said he believed CETA would be far less contentious when it went before the EU's national parliaments. "My prediction is there is no huge problem with European parliaments. After my talks with all 28 member states’ leaders, I have no doubt CETA is the least controversial trade agreement you could imagine," he said. 

CETA could take years

However, some analysts believe that getting the deal ratified by the EU’s 28 national governments plus a string of regional assemblies, could yet take years. Gus Van Harten, an Osgoode Hall law professor who specialises in trade at York University, Toronto, told the Canadian Press that he believes the foreign investor protection mechanism in CETA could pose problems, with national and regional governments having the ability to block it, which in turn would end the provisional application of the deal. "The inclusion of the foreign investor protection system in the CETA was a dubious decision and political gamble from the start, and it has now blown up in a lot of faces,” said Prof Van Harten. “CETA as a whole remains in jeopardy regardless of signature."Geoffrey Yu, head of UBS Wealth Management’s UK investment office, said Wallonia's objections to CETA illustrated how difficult it could be to get a decision in the EU. "The EU’s detractors will cite CETA’s travails as another example of the bloc’s institutional failures. In some respects, the impasse is a vindication of the UK electorate’s decision to leave the EU and pursue its own agreements," he said. Mr Yu added that when the UK government is free to make its own trade deals after leaving the EU, it should target willing partners such as emerging markets. 

Boost to EU and Canadian economies

The deal removes 99 per cent of tariffs between Canada and the EU, and proponents of CETA say it will increase Canadian-EU trade by 20 per cent, boosting EU economies by £10.9 billion a year and Canada’s by £7.4 billion.Some have suggested that CETA could provide a blueprint for a Brexit deal between the UK and the EU but Mr Juncker dismissed such suggestions. “I don’t see any relation between what we are signing today and the Brexit issue,” he said.But he added later, "We are setting standards (with CETA) which will determine globalisation in the coming years. Nothing in other trade agreements will be able to remain below the level of what we have reached today with Canada."

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