EU Struggles with the CETA Negotiations

 /  March 6, 2017, 4:51 p.m.


The Comprehensive Economic Trade Agreement (CETA), a new trade deal between Canada and the European Union (EU) that aims to facilitate the transfer of goods and services between the two regions, has faced various barriers that have slowed negotiations and will complicate its ratification. A recent vote against CETA by the regional parliament of Wallonia, a region of Belgium, has put these barriers, stemming from institutional and legal factors as well as from a vocal minority’s opposition to the deal, under the spotlight. The negotiation structure of the EU (as agreed upon in the Treaty on the Functioning of the European Union) allows individual states to alter or reject the treaty before its ratification. As such, Wallonia’s vote against easier access to Canadian goods is a consequential, albeit solitary, one. This vote is yet another example of an ascendant view in EU politics: that coordinating with other countries means surrendering sovereignty. Even as it attempts to further its own interests, the EU is limited by barriers that it has imposed on itself.

A prominent objection to CETA from EU countries concerns the “Investor-State Dispute Mechanism” (ISDM), which allows corporations to sue governments over any policies that go against the corporations’ private financial interests and the terms of CETA. This is particularly opposed by labor rights and environmental activists who fear that ISDM will make it harder to fight for their causes by giving corporations undue privileges over national governments. It is also feared that CETA is a backdoor for the Transatlantic Trade and Investment Partnership (TTIP). The TTIP, an ambitious trade agreement between the US and the EU, has already faced strong popular opposition, particularly from the environmentalist NGO Greenpeace. A number of anti-TTIP activists have voiced strong concerns that CETA paves the way for further negotiations surrounding TTIP. CETA also faces opposition from Canadian local governments and municipalities who fear that the deal could potentially undermine public control over water and other local utilities and services.

However, the most advertised hurdle faced by CETA during the ratification process is the opposition of the Wallonian parliament. On October 14, the parliament of Wallonia, a region in Belgium, voted to block CETA. Due to the way in which deals with the EU are negotiated, Wallonia was able to prevent the entire nation of Belgium from giving their consent to the deal. Dairy farmers make up a large portion of the Wallonian workforce: there are only three humans for every cow in this region and dairy farmers are heavily subsidized. The unobstructed Canadian competition ushered in by CETA would pose a challenge to these subsidized farmers. As a result, protests have broken out, and widespread Wallonian opposition to CETA still exists.

Traditionally, because trade deals affect the EU as a bloc, they have been regarded as within the purview of the EU collectively. This means that after the European Commission (the EU’s executive arm) negotiates the trade deal, the deal can then be passed in the Council of Ministers (representing the member states) with a majority rather than unanimously. If the deal covers certain issues such as cultural affairs, however, the vote in the Council needs to be unanimous, though in practice, trade deals tend to require unanimity in any case. Even when all proposals from all parties have finally been presented, additions, amendments, and regime changes in different countries (and within the individual governments) have the potential to throw the entire process into disarray. This complicated negotiation structure, compounded with the aforementioned flightiness of public opinion, has made for a difficult policymaking process.

Although negotiations for CETA have been completed, there remain significant institutional hurdles that block the enactment of the agreement in full. The agreement was signed on October 28, and the Council subsequently authorized a provisional application of sections of the agreement. However, as per a choice made by EU member states, the agreement in full, including the contentious clauses on the Investment Court System, can only be implemented after every member state has unanimously ratified the agreement. For example, to implement CETA in Belgium, it is necessary for both the Chamber of Deputies and the Senate to pass exactly the same law implementing the trade agreement within the country. Once the Chamber of Deputies passes a law (a process which involves a committee discussion and a vote), it goes to the Senate. If the Senate amends the law at all (also through a long committee and voting process), it then gets sent back to the Chamber of Deputies, which can further amend it. This process continues until exactly the same law is passed in both chambers. In a system that involves analogous procedures in all member states, clearly the ratification of CETA will be a long and bureaucratically complex affair.

The majority of the challenges faced by CETA during the ratification process stem from the complex negotiation structure of the European Commission. The concerns over CETA’s implications voiced by a few select groups within the EU and Canada have considerably decelerated the treaty’s implementation. This process sheds light on how the EU’s complex ratification system can impede its interests by requiring regions to surrender sovereignty in the pursuit of comprehensive collaboration. The European Parliament voted in favor of CETA on February 15, 2017, but the deal cannot take effect until each EU national parliament has ratified it. Given the opposition to CETA within Belgium alone, it will be quite some time before we can expect to see this trade agreement come to fruition, if it happens at all.

Research Cohort Members: Bryan Popoola (Cohort Leader), Dimitry Karavaikin, Justin Skobe, Kevin Petersen, Chahat Kapila, Lecy Campbell, Andres Marton, Lorenzo Bartolini, Alexander Glaubach, Viivi Jarvi

The image featured in this article is licensed under Creative Commons. The original image can be found here.

EUChicago Research Team


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