CETA moves one step forward

Preceded by controversial political and legal debates in a range of EU Member States, the EU and Canada signed the Comprehensive Economic and Trade Agreement (CETA) in October 2016. The Belgian federal government long lacked the support of some regional governments needed to add its essential signature to CETA in the Council. This led to the solemn signing ceremony to be postponed while the EU projected an image of powerlessness on the international stage.

At EU level, the European Parliament still needs to approve CETA. After the plan to vote on the agreement already in December or January was heavily criticized, the schedule now foresees the vote in January 2017 in the Committee on International Trade and in February in the plenary. If the plenary of the European Parliament were to reach a positive decision on CETA as planned, the core elements of the agreement could enter into force rapidly. The Council has pencilled in a notification of the provisional application for mid-February 2017. Insofar as Canada has also notified by the end of that month, the parts of the agreement, which fall within the exclusive remit of the EU would provisionally enter into force in March 2017. These include dismantling of customs duties and access to public procurement. In particular, the provisions on investment protection would not be applied provisionally.

Can CETA still fall by the wayside?

The agreement will enter definitively and completely into force only once it has been ratified in all EU Member States. Experience teaches that this process can take a number of years. In light of the critical debate on CETA in a few Member States and given that some 40 parliaments must endorse the agreement in Europe the definitive ratification could also fail. Some Belgian regions have already announced that they will block definitive approval of CETA by Belgium if the content on investor protection is not amended. In addition, Belgium has announced that it will ask the European Court of Justice to rule on whether the CETA provisions on investment protection are compatible with European law. Whereas an urgent request to the Federal Constitutional Court against signature of CETA by Germany has been rejected subject to certain conditions, a ruling on the main substance has yet to be issued.

 

If ratification fails in one Member State, the elements of CETA, which are not yet in application, would never enter into force. There are still legal arguments about whether and how in such a case provisional application of CETA would be ended.

 

Lessons for the future

 

Criticism and uncertainty in the European CETA debate has not only sown doubts about the EU’s dependability as a negotiating partner and as a global player. Within the EU, ever more voices are calling for a clear distinction to be made between shared EU / Member-State competences on the one hand and exclusive EU competence on the other hand in future free trade agreements. The lion’s share of trade agreements could then be definitively ratified and applied rapidly with a qualified majority in the Council and following approval by the European Parliament.