Manufacturing & Supply Chain

The EU-Canada Comprehensive Economic and Trade Agreement (CETA), which aims to boost goods and services trade and investment flows, was approved by the European Parliament on Wednesday. The landmark trade deal could apply provisionally from as early as April 2017.

“By adopting CETA, we chose openness and growth and high standards over protectionism and stagnation,” Parliament’s rapporteur for the CETA agreement Artis Pabriks said after the vote. “Canada is a country with whom we share common values and an ally we can rely on. Together we can build bridges, instead of a wall, for the prosperity of our citizens. CETA will be a lighthouse for future trade deals all over the world”.

The deal was approved by 408 votes to 254, with 33 abstentions.

CETA will remove tariffs on most traded goods and services. It also provides for the mutual recognition of certification for a wide range of products. Canada is to open up its federal and municipal public procurement markets, which are already open in Europe. EU suppliers of services ranging from sea shipping through telecoms and engineering to environmental services and accountancy will get access to the Canadian market.

In talks, the EU secured protection for over 140 European geographical indications for food and drinks sold on the Canadian market. Sustainable development clauses were included to safeguard environmental and social standards and ensure that trade and investment enhance both.

To allay citizens’ concerns that the deal gives too much power to multinational companies and that governments will not be able to legislate to protect health, safety or the environment, the EU and Canada recognise in both the preamble to the deal and an attached joint declaration that its provisions apply without prejudice to the domestic right to regulate.

The CETA deal will not remove tariff barriers in the fields of public services, audiovisual and transport services and a few agricultural products, such as dairy, poultry and eggs.

In response to European parliamentary pressure, the controversial investor-state-dispute settlement (ISDS) mechanism was replaced by the Investment Court System (ICS), which aims to ensure government control over the choice of arbitrators and enhances transparency.

MEPs also gave their consent to the conclusion of an EU-Canada Strategic Partnership Agreement (SPA). Complementing the CETA, this deal aims to step up EU-Canada bilateral cooperation on a wide range of non-trade issues such as foreign and security policy, counter-terrorism, fighting organised crime, sustainable development, research and culture. The EU-Canada SPA was approved by 506 votes to 142, with 43 abstentions,

The CETA deal could apply provisionally on the first day of the second month following the date both sides have notified each other that they completed all necessary internal procedures. MEPs expect this to be the case on 1 April 2017 at the earliest. As CETA was declared a mixed agreement by the European Commission in July 2016, it will also need to be ratified by national and regional parliaments.

The CETA negotiations were launched in May 2009 and concluded in September 2014. The EU and Canada signed the agreement on 30 October 2016. In 2015 the EU imported goods from Canada worth €28.3 billion and exported goods to it worth €35.2 billion, a figure that is expected to rise by more than 20% when the agreement is implemented in full.