Canada and the European Union today announced that they have
completed negotiation of their Comprehensive Economic and Trade
Agreement (CETA). The announcement puts to rest extended
speculation about whether a deal was still possible, speculation
fuelled by the nearly ten months that has elapsed since the parties
announced an “agreement-in-principle” last October.
The October political announcement suggested that only minor
technical work remained. In fact, some significant elements of the
CETA remained outstanding, including the all-important reservations
that determine the extent of each side’s commitments on
market access and national treatment for investment and services
(especially at the sub-national and EU Member State levels) and the
financial services text. Achieving buy-in from EU countries on
certain market access issues, quota allocations for beef and pork
among them, also proved more difficult than Canada had been led to
believe by its Commission counterparts. Some of this may have
reflected honest misjudgment, including of EU Member State
sensitivities to the CETA creating possible
“precedents” while the EU began negotiations on a trade
deal (TTIP) with the United States. However, with today’s
announcement, it can fairly be said that what remains really is
technical work: the legal review, or “scrub”, to ensure
the agreement is internally coherent and says what the negotiators
intended it to say, and translation of the text into French and 21
other official EU languages.
As much of the text was completed months ago, work has
undoubtedly already begun on the scrub and translation. Still,
these are finicky and time-consuming processes which we expect will
take several months. Once they are completed, the text will be
ready for signing. On the EU side, this will require a decision of
the EU Council; the process is simpler on the Canadian side where
policy approval for signing is obtained by a decision of Cabinet,
along with an Order-in-Council granting signing authority. All
things considered, it could well be a year from now before the
agreement is signed.
As a formal matter, the CETA will not come into force until it
has been ratified. Again that is a relatively straightforward
process on the Canadian side – particularly with a majority
government to pass the necessary implementing legislation –
but not so clear for the EU, where the respective roles of the
Commission and Member States in the post-Lisbon Treaty era remains
the subject of some debate. We know that it will require a vote of
the EU Parliament but whether Member State parliaments too will
have to approve the agreement is still a question. Ratification
therefore could be two years away, maybe more.
The good news is that the CETA itself contemplates that it can
be “provisionally applied”. This means that once it is
signed and any necessary implementing legislation enacted, Canada
and the EU can agree to give effect to many parts of the treaty
before it is ratified. This will include the tariff elimination
As for when the CETA text will be made public, we expect –
and hope – it will be soon. Ordinarily, Canada does not
release the texts of trade treaties until they are signed. That has
its logic but is more difficult to justify in the case of an
agreement of such economic and political importance as the CETA.
The NAFTA text was released in draft not long after those
negotiations concluded; something similar would make sense for the
CETA text, perhaps by September’s Canada-EU Summit between PM
Harper and EU President Barroso.
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