EU-Canada’s CETA Deal: The Ratification Process Set for a Bumpy Ride

Written by | Thursday, July 7th, 2016

The European Union has recently concluded a free trade deal with Canada – the Comprehensive Economic and Trade Agreement (CETA) – that is one of the most advanced and complex agreements of its kind to this date. However, the fate of the CETA is now uncertain after the European Commission announced on Tuesday (5 July) that the EU’s 28 national parliaments would have to vote on the treaty before it can be definitively adopted.

While the European executive had previously supported keeping the decision on CETA an exclusive EU competence, with the ratification process dependent purely on the European institutions, this compromise is a response to an increased pressure from European countries that they be consulted before any deal can be enacted. The ratification process for CETA is thus set to be a bumpy one.  “From a strict legal standpoint, the Commission considers this agreement to fall under exclusive EU competence. However, the political situation in the Council is clear, and we understand the need for proposing it as a ‘mixed’ agreement, in order to allow for a speedy signature,” Trade Commissioner Cecilia Malmström told journalists in Strasbourg.

If finally ratified, CETA is projected to generate growth and jobs by boosting exports, lowering costs of imports, offering greater choice to consumers and elevating the EU’s strict standard for products. CETA will moreover improve business opportunities for European companies in Canada since under the deal they will cherish the best conditions Canada can offer to any trading partner. This will be naturally conducive to leveling the playing field for both EU and Canadian businesses.

CETA will bring palpable benefits for European consumers and companies by cutting or removing tariffs, which will be very beneficial for small and medium-sized companies. On the first day of the implementation, Canada will eliminate duties worth 400 million euros for goods coming from the EU. While many tariffs and duties will be scrapped and consumers will have a greater choice, the CETA upholds the EU standards for health and safety, the environment and consumer rights. These standards will remain untouched and imports from Canada will have to satisfy all EU product rules and regulations – without exception.

CETA is one of the most ambitious and far-reaching deal ever concluded by the EU in the area of investment and services. It will bring more opportunities for European companies to provide services including specialized maritime services, environmental services, telecom and finance, at both national and federal level. Moreover, CETA will make it easier for company staff to transfer across the Atlantic between the EU and Canada. This will also enable European firms to have operations in Canada and supply legal, architectural and similar services. Overall, CETA will make European firms more competitive in Canada as they will be able to provide after-sales services.

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