EU Parliament approves CETA: the EU-Canada free trade deal sees the light in Trump’s gloomy era

eu-canada-ceta-fta

Jean-Claude Juncker, President of the EC, Federica Mogherini, High Representative of the Union for Foreign Affairs and Security Policy and Vice-President of the EC, and Cecilia Malmström, Member of the EC in charge of Trade, participated in the 16th EU/Canada Summit together with Justin Trudeau, Canadian Prime Minister, Donald Tusk, President of the European Council, and Martin Schulz, President of the EP. Greeting between Donald Tusk, Justin Trudeau and Jean-Claude Juncker (from left to right). © European Union , 2016 / Source: EC – Audiovisual Service / Photo: Jennifer Jacquemart.

After seven years of talks and remarkable twists, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) was approved by the European Parliament last week. The EU lawmakers formally backed last Wednesday the landmark free trade deal which aims to eliminate up to 99% of tariffs on exported goods with Canada, by a vote of 408 to 254.

Despite crowds of protesters staging a sit-in right in front of the institutional building in Strasbourg, France, last week’s move has already been celebrated by many as a victory for a free-exchange market in the face of growing populist and protectionist calls by US President Donald Trump.

The background

The European Union and Canada started conversations on a possible bilateral trade agreement in late 2008, when the joint study “Assessing the Costs and Benefits of a Closer EU-Canada Economic Partnership” was released. They then officially launched negotiations over a formal free trade pact on 6 May 2009 at the Canada-EU Summit in Prague. An agreement in principle was signed by the Canadian Prime Minister Stephen Harper and European Commission President José Manuel Barroso on 18 October 2013, while negotiations were concluded on 1 August 2014.

It took another full two-year period before the two parties could formally sign the deal in October 2016, after months of controversies, amid the rise of anti-globalisation protests and local veto threats. Indeed right before the scheduled signature of CETA on 27 October 2016, the “Walloon question” exploded, when Belgium announced it was unable to go ahead, as one of its regional governments, Wallonia, rejected the signature.

It took days to solve the intra-Belgian controversy, but then Belgium paved the way to CETA as the last member state of the bloc, and Canadian Prime Minister Justin Trudeau and the highest representatives of the European Union could finally seal the agreement.

The deal in figures

Now that roughly 58 per cent of the members of the European Parliament have formally ratified the CETA, with a vote of 408 in favour, 254 against and 33 abstentions, the EU-Canada pact is real. The trade between the two sides amounts to more than € 60 billion (€63.5bn, or $ 67bn, or £54bn in 2015), and CETA will see a gradual removal of 99% of non-farm duties between the EU’s market of 500 million people and Canada’s 35 million.

Other than slashing tariffs on farm products and general goods, CETA aims also to create common rules covering a broad range of trade activities, including services and intellectual property.

The EU expects the deal with Ottawa to boost bilateral trade by 20% by removing 98 percent of tariffs on goods from the outset and 99 percent after seven years. Supporters claim that the pact will boost the EU economy by 12 billion euros ($12.7 billion) a year and Canada’s by C$12 billion ($9.18 billion) annually, as well as expand two-way trade by about a quarter. The Guardian reports that CETA will be worth $1.6bn a year to Britain alone, in the period before the UK withdraws from the EU.

Open markets and free trade

The agreement has been welcomed by many as a success for an open markets policy, in the face of protectionist actions by US President Donald Trump, who withdrew from the Trans-Pacific Partnership (TPP) and wants to reshape the North American Free Trade Agreement (NAFTA).

Jean-Claude Juncker, President of the European Commission, welcomed the agreement and said it represents “an important milestone in the democratic process of ratification of the agreement”. “This progressive agreement is an opportunity to shape globalisation together and influence the setting of global trade rules”, he added.

Guy Verhofstadt, the leader of the ALDE liberal group, openly mentioned Mr. Trump and said: “President Trump has given us another good reason to intensify our links with Canada”. “While Trump introduces tariffs, we are not only tearing them down but also setting the highest progressive standards”, he also said last week.

Trade Commissioner Cecilia Malmström also commented the move and said: “This vote is the start of a new era in EU-Canada relations – together we are sending a strong signal today. By building bridges rather than walls, we can face the challenges that confront our societies together”. “In these uncertain times, with rising protectionism around the world, CETA underlines our strong commitment to sustainable trade”, she highlighted in an official EU press release.

Hot topics and open complaints

However, the deal is still extremely divisive, especially in the Old Continent. As it happens for the TTIP, European trade unions and environmental groups believe the pact will ultimately lower European standards in a broad range of goods, especially in food and environmental questions, and that will also allow multinational corporations to dictate public policy.

The hottest point of discussion through the years has been the so-called Investor-State Dispute Settlement, a clause that would allow multinational companies to sue local governments if found guilty of impeding their interests.

The European Union has repeatedly said that such a clause would never be part of an agreement, and finally announced last week that an “improved Investment Court System” has totally “replaced” the clause in the final CETA text. Despite this, hundreds of protesters gathered at the gates of the European Parliament building in Strasbourg ahead of the vote, protesting against a deal that, according to them, will only benefit large multinational firms.

The EU as a model

Canadian Prime Minister Justin Trudeau last week praised the European Union as an “unprecedented model for peaceful cooperation”. Speaking to the European Parliament on Thursday, Mr. Trudeau said the 28-nation bloc had a crucial global role to play, Reuters reported. “You are a vital player in addressing the challenges that we collectively face as an international community. Indeed the whole world benefits from a strong EU,” Trudeau stressed.

While commenting the freshly-sealed CETA, Mr. Trudeau said that, in the current times, the EU and Canada “must choose to lead the international economy”, and not “simply be subject to its whims”. “If we are successful, CETA will become the blueprint for all ambitious, future trade deals. If we are not, this could very well be the last. So make no mistake, this is an important moment for us”, he added.

Despite the conclusive vote, CETA will be fully implemented only once the parliaments in all Member States ratify the deal according to their respective domestic constitutional requirements, the European Commission said. According to the European Commission, the EU is Canada’s second largest trade partner after the US, and Canada is the EU’s 12th-biggest.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Featured Stings

Deutsche Bank again in the middle of the US-EU economic skirmishes

Bugged Europe accepts US demands and blocks Morales plane

Failing to see reality or deceiving the masses? The EU about poverty and social exclusion

How will Brexit affect higher education in the EU?

The EU can afford to invest trillions in support of employment

EU-US trade talks go ahead despite Prism and civil rights breach

Why the euro may rise with the dollar even at lower interest rates

New skills needed for medical students in Industry 4.0

Why the Greeks forgave Tsipras’ pirouettes around austerity and voted again for SYRIZA

A Sting Exclusive: “Our ambition is by 2020 Indonesia to become an emerging power of World’s Maritime Access”, reveals the Chargé d’Affaires at the Embassy of Indonesia in Brussels, treating WEF, ASEAN and EU-Indonesia relations on the eve of the World Economic Forum East Asia 2015 in Jakarta

European Youth Forum @ European Business Summit 2014: European Youth Unemployment

UK’s Cameron takes the field to speed up TTIP talks. Will “rocket boosters” work?

Where is Egypt leading the Middle East and the Mediterranean economy?

ECB doesn’t dare touch Eurozone’s big banks

Pro-EU forces won a 70% triumph in the European elections

Love Affair with Some(one)/(thing)

Irish Presidency: Not a euro more for EU budgets

Greece did it again

New skills agenda for Europe needs real investment

A Young entrepreneur cries out: “start in Europe, stay in Europe”

The European Sting @ Mobile World Congress 2014, Creating What’s Next for the World. Can EU Policy follow?

Who is to lose from the 6-month extension of the EU economic sanctions against Russia?

Germany loses leading export place

Eurozone: Bankers-politicians rig keeps robbing taxpayers

Eurozone: Negative statistics bring deflation and recession closer

South Eurozone countries threatened by rising borrowing cost and expensive euro

South Eurozone urgently needs fairer distribution of taxation burden

ITU Telecom World 2017: exploring smart digital transformation

The EU slowly exits from “Excessive Deficit Procedure” and hopefully from ‘Excessive Austerity Procedure’ too

Human rights in Brussels and in Beijing: a more balanced approach needed

France asks help from Germany but it will not be for free

Draghi’s ‘quasi’ announcement of a new era of more and cheaper money

Ministers for Youth miss the opportunity to improve social inclusion of young people

Germany hides its own banks’ problems

After Brexit and Grexit, Brussels to deal with Poloust

European Council: Choosing new leaders for the EU betrays efforts for a wider arrangement

The United Kingdom’s decision to leave the European Union will impact young people’s future the most

Greece’s future solely in the hands of Tsipras; he can direct the poor country any way he likes

Forget about growth without a level playing field for all SMEs

The “Legend of the Sun” wishes you Happy Chinese New Year 2015 from Brussels

Cancer research put at risk by General Data Protection Regulation? The possible dangers of a data privacy EU mania

French election: Will France vote for a reformed or no EU?

IMF – World Bank meetings: US – Germany clash instituted, anti-globalization prospects visualized

The West and Russia impose a new order on the world

European Youth Forum celebrates 20 years of fighting for youth rights

Poverty and social exclusion skyrocket with austerity

The EU threatens to occupy Libya militarily; is another colonial war brewing?

Impacting society with digital ingenuity – World Summit Award proclaiming the top 8 worldwide

IMF’s Lagarde indirectly cautioned Eurozone on deflation

CHINA UNLIMITED. PEOPLE UNLIMITED. RESTRICTIONS LIMITED

230 Junior Entrepreneurs and over 70 guests attended the International Congress on “Entrepreneurial Skills for Youth”

COP21 Breaking News_04 December: Launch of CREWS, climate risk & early warning systems

MWC 2016 LIVE: Under Armour learns from “robust community of data”

Deutsche Bank: the next financial crisis is here and the lenders need €150 billion from taxpayers

MWC 2016 Live: Roshan CEO opens up on Afghanistan challenges

Cameron’s “No Brexit” campaign wins top business support as Tory front breaks

Greece returns to markets at a high cost to taxpayers, after four years out in the cold

EU Parliament semi worried over democratic deficit

Berlin and Paris pursue the financial fragmentation of Eurozone

Eurozone: Economic sentiment-business climate to collapse without support from exports

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s