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CETA three years on: what still remains to be done

It’s three years since Canada and the European Union provisionally applied the EU-Canada Comprehensive Economic and Trade Agreement, aka CETA. Leaders on both sides of the Atlantic are taking stock of which parts of the deal work and which don’t. Meanwhile dark clouds loom over the deal’s definitive ratification in European Union member states.

The numbers speak for themselves

The tone of a major CETA anniversary event attended by Canadian trade minister Mary Ng, European Commission officials and their Canadian counterparts was upbeat and cooperative.

Mary Ng, Canada’s Minister of Small Business, Export Promotion and International Trade.

“Today, I’d really like to signal optimism,” Ng said. The Canadian leader highlighted that CETA has brought about trade with high labour, environmental and consumer rights standards.

Both Canada and the bloc have seen year-on-year increases in trade flows and boast of the pact as a standard-setter between closely aligned countries that are “best in class” on trade sustainability.

With a 27% increase in the trade of goods and a 47% jump in services trade since 2017, “economically, if you just look at the statistics it’s a very good agreement,” said Rupert Schlegelmilch, DG Trade’s director for the Americas, agriculture and food safety.

Uneven rollout

“The work on CETA now is implementation, implementation, implementation,” Schlegelmilch said.

The Canadian minister and officials from both parties recognised that some gaps remain in fulfilling the agreement’s potential, including market access for Canadian agrifood products and mutual recognition of professional qualifications.

“We will problem-solve together,” Ng said before adding, “committees are really important as forums to have the necessary dialogues to raise issues.”

There are 19 committees set up under CETA to continue working on what officials called a “living text.” Since 2017, all committees have met at least twice, with the most recent meeting being the agriculture committee from 21 to 22 September. The agenda included a host of contentious topics including EU beef and pork quotas, Canadian cheese quotas and EU labelling requirements.

Officials said that they will continue their close day-to-day cooperation, and there are other committee meetings scheduled—on 30 September, Canadian and EU officials will discuss car regulations.

“This implementation needs to be transparent and inclusive. We publish our agendas, we publish our reports,” Schlegelmilch said.

Some business sectors see CETA so far as a disappointment because of shortcomings on implementation. The Canadian Agri-Food Trade Alliance wrote an open letter yesterday to Ng, saying the agreement has “failed to deliver on its promises for Canada’s agri-food exporters”.

Canada’s agrifood lobby accuses the EU of upholding non-tariff trade barriers, which include not recognising the conformity of Canadian meatpacking, refusing to import canola over alleged sustainability concerns and demanding ever-lower levels of pesticides in grains produced for exports to the EU.

Another major hurdle to increasing trade has been the mutual recognition of professional qualifications. Currently, a Canadian architect or accountant cannot practice in the EU and vice versa. Schlegelmilch called for patience as both parties are working on a first mutual recognition deal for architects. Yet three years down the line, with precious few professional qualification agreements to boast of, this part of the CETA deal has yet to yield results.

Ratification qualms

The European Union’s domestic trade politics is casting a shadow over the future of the agreement. The EU-Canada trade pact is in a limbo.

Some of its provisions – notably controversial ones on investment protection – are not yet in force because they require all member states’ consent, as CETA is a ‘mixed agreement’ under EU law.

If only one EU member-state’s parliament were to vote against the deal flat out, the parties would have to freeze the provisional implementation and revert to trade as it was before the deal was struck.

In specific cases like Belgium, the federal government can only sign off once the three regional and two language community parliaments have given their green light.

After seven years of negotiations and three years of provisional application, only 14 of the EU’s 27 member states have ratified the agreement. This leaves another 13 countries – including the largest EU states – to definitively sign off on CETA.

With the global increase in protectionist tendencies, lack of trust from the general public and sustainability concerns over recent years, obtaining parliamentary sign-offs is proving complicated.

Schlegelmilch said, “not everyone who is speaking about CETA is telling people the truth. […] I’m not pointing fingers at anyone, but there is a need to set the record straight from time to time, which we do in a non-confrontational manner.”

How rocky the road to CETA ratification is has become even clearer with the recent Cyprus halloumi cheese controversy. On 31 July of this year, the Cypriot parliament voted 37 to 18 against CETA largely because parliamentarians deemed that halloumi cheese and other agricultural products would not be sufficiently protected under the agreement. Now internal negotiations are happening before the text will be resubmitted to the Cypriot parliament.

EU trade commissioner Valdis Dombrovskis told the press just yesterday that “Cyprus has not notified the European Commission of definitive failure to ratify CETA.”

The future of the EU-Canada trade agreement is far from certain—the agreement will probably live on in the realm of provisional application for months, if not years to come.

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