21 September 2017

Most of CETA enters into force today: four things you need to know

Ratification hurdles at nearly 40 parliaments in Europe means the trade deal is not out of the woods yet

Simon McKeagney, Editor

The Greens/EFA Group in the European Parliament has long opposed the CETA trade agreement, for the reasons outlined extensively in this blog and throughout the debate across Europe. It suffers many of the same problems that saw TTIP stalled in Europe, including exclusive rights for investors and measures that undermine quality food and climate policies, among many. 

Now CETA finds itself at the mercy of nearly 40 national and regional parliaments, who need to ratify CETA after the European Court of Justice (ECJ) confirmed last month that some elements of the deal fall within Member State competence- namely investor protection. So here are some important things to consider:

1) Your national parliament could still stop CETA

To date, only a handful of those 40 parliaments have ratified CETA, including Latvia (23/02/17) Denmark (06/06/17) Spain (29/06/17) Croatia (30/06/17) the lower house parliament in Czech Republic (13/09/17) and Portugal (20/09/17). Others have imminent votes in the coming in the weeks ahead, including Lithuania, Finland and Italy.  

But there’s a lot left to play. The two most vocal countries against CETA have no date set for ratification for one very simple reason: it’s election season. Germans and Austrians head to the polls in the coming weeks and political parties supportive of CETA do not want to see a repeat of scenes from last year, where tens of thousands of people took to the streets against that deal and the now-defunct TTIP.  

In France, Macron spent most of June’s election avoiding CETA-trouble by agreeing to setup an “expert committee” to investigate the impact on EU environmental and health effects. The committee published their report on Sept 8, after a short few weeks of interviews and review. The report was largely critical of the lack of binding environmental protections, including a lack of climate commitments or efforts to reduce subsidies in fossil fuels, and said investment protection was “not really useful” in the relations between Canada and the EU. It did not go as far to say CETA should not be ratified by France, but instead offers ten recommendations that Macron’s office should follow (read them here).

Watch this space to see if the French government take up any of the recommendations. After all, the committee was given no powers to compel the government to do so.

That leaves at least 17 EU countries where the timeline for ratification of CETA remains unknown. The EU doesn’t require a Member State to ratify trade agreements under a set time period, so if CETA is a difficult political issue, governments may be most interested in putting it on the long finger.  

In the Netherlands for instance already 200,000 signatures have been gathered earlier this year to hold a referendum on CETA, two thirds of what it required for a formal request. In Slovenia, where CETA was also negatively received, there are no plans to ratify the deal any time soon. 

2) What happens if my parliament fails to ratify?  

Despite still requiring ratification in many national parliaments, the vast majority of CETA will be applied today in what is called ‘provisional application’. This includes 90% of the agreement that doesn't fall under Member State competence. As it stands, if one or more parliaments fail to ratify CETA, there are no mechanisms in place to discontinue provisional application. In short- it is all up to legal interpretation; anything could happen.

In all likelihood, the ECJ would need to determine whether the whole agreement becomes invalid, or if only the sections under Member State competence become null and void for the country whose national parliament voted no.  

Either way, a high-profile court case on the future of CETA would rekindle public attention to a deal that has caused headaches across Europe in recent years. There would be public uproar if rejections by a number of EU countries meant that CETA continued regardless. 

3) But isn’t CETA already going to the courts?

Yes. One year after the debacle in Belgium, where the region of Wallonia refused to grant the federal government permission to sign off on the deal, the Belgian government finally sent CETA to the ECJ on Sept 6, a condition demanded by Wallonia. That case will focus on whether or not investment protection mechanisms are compatible under EU law. 

If the court rules that investment protection is not compatible, the Commission may remove the mechanism entirely from trade agreements. This has already been floated by the Commission in recent weeks when it comes to upcoming trade negotiations with Australia and New Zealand. Removing investment protection would be a victory for campaigners and NGOs, who have long sought for the mechanism to be abandoned. But it may also mean that in the future, national parliaments will not be required to ratify any part of any trade agreement the EU negotiations with third countries. CETA may be the last of an old way of doing business, but it comes at a cost.

4) Future deals need a democratic-injection 

If CETA is the last deal that requires oversight from national parliaments, it is clear we have a democratic void. Already European leaders are struggling to find ways to bring Europe closer to citizens and for Member State governments to take responsibility for the decisions they have agreed at EU level.  

The Green/EFA Group believe that parliaments across Europe need to be involved much earlier in the process in order to give more legitimacy to trade negotiations, and so that the public are better informed on what their government’s are agreeing to on their behalf. 

That means every mandate for any trade agreement in the future needs to be approved by national parliaments before the negotiations begin, not after. That means the European Parliament should have co-decision in writing the mandate for those trade negotiations together with the Council. It is not good enough for the only directly elected body at EU level to just receive a yes/no vote at the end of years of negotiations.  

Without concrete steps to inject accountability and democracy into EU trade policy, we will see large scale protests against future agreements. And you can bet that many will end up on the shelf gathering dust along with along with ACTA and TTIP. 

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