bilaterals.org logo
bilaterals.org logo

EU-Canada (CETA)

March 2009 saw the formal start of negotiations towards the Comprehensive Economic and Trade Agreement (CETA) between Canada and its second largest economic partner, the European Union. The Toronto-based lobby group, the Canada Europe Roundtable for Business, supported by 60 European and Canadian corporate executives, had been pushing for this deal, for which its most vocal supporters in Europe were France’s Sarkozy and Germany’s Merkel. The agreement was signed in September 2014 and is currently in the process of being ratified.

CETA is a wide-ranging deal which includes trade in goods, intellectual property, investment, technical barriers to trade, regulatory cooperation, sanitary and phytosanitary measures and competition policy.

During the negotiations, a number of municipal councils in Canada, including Toronto’s city council, voiced their opposition and voted to demand that they be excluded from such a deal, citing issues over their ability to make decisions, particularly in relation to government procurement, one of the EU’s main interests.

Many were concerned about the deal’s proposed investor-state dispute settlement (ISDS) mechanism, which gives corporations from either side of the Atlantic the right to sue a state if new laws or regulations negatively affect their expected profits or investment potential.

In the face of an outcry from European civil society groups, the European Commission designed a new arbitration procedure, dubbed an ‘investment court system’, to replace ISDS. In February 2016, the Commission announced that the new ISDS mechanism had been included in the treaty. However many critics on both sides of the Atlantic say that this new system is largely window-dressing, does not address the core of the problem behind investor-state dispute measures, and they continue to oppose ISDS in any form.

ISDS has also been described as a clear threat to any measures aiming to tackle climate change. The greenhouse gas emissions from Canada’s tar sands oil are 23 per cent higher than those of conventional oil. As CETA will liberalise the transatlantic energy trade, it will lead to a rise in production of tar sands oil for the European market. Any government trying to limit the flow of tar sands oil in response to global warming could face an ISDS claim from an oil corporation.

As part of the negotiations, EU delegates sought the recognition of European geographical indications (GI) such as Feta cheese or cured meats. Dairy farmers in Canada were worried that EU demands would prevent them from using certain names on cheeses. Eventually, the agreement recognised 173 European geographical indications, excluding wines and spirits.

The impact of CETA on farmers in general is of particular concern. Transnational seed corporations will be handed sweeping new enforcement powers to maintain their control over seeds. Worse, the agreement will almost entirely eliminate the rights of farmers to save, reuse and sell seeds. Besides, removing tariffs on agricultural goods will lead to a loss of revenue for farmers and will only benefit large exporting farming companies.

The “Cross Border Trading in Services” chapter liberalises labour mobility. Temporary work permits can be issued to workers in certain professions from one signatory country who desire to work in the other party’s territory. In time, this will mean fewer permanent jobs, as the trend towards temporary contractual work will increase, and lower wages, caused by more workers competing for the same jobs.

In addition, CETA institutionalises regulatory convergence between the parties, which implies future cooperation on all regulations about trade in goods and services. A Joint Committee and the Regulatory Cooperation Forum are intended to deal with the harmonisation, the mutual recognition, or the conformity assessment of regulations on both sides, either in place or planned, to overcome divergences that inhibit trade. This mechanism would restrict the states’ right to regulate and grant extended regulatory power to stakeholders (i.e. corporations) involved in the process. Further, the precautionary principle, a core element of European regulatory policy, is practically absent from CETA.

On 21 September 2017 CETA entered into force provisionally, after it was ratified by the European Parliament and it received Royal Assent in Canada on 16 May 2017. Most of the agreement now applies but national parliaments - and in some cases regional ones as well - in EU countries need to approve it before it can take full effect. The controversial investor-state dispute settlement mechanism (ISDS) will only be implemented when the deal is fully in force.

The text of the agreement: https://www.bilaterals.org/?eu-canada-fta-ceta-consolidated-31577

last update: February 2018
Photo: M0tty/CC BY-SA 4.0


Libre échange avec l’UE: Ottawa et les provinces devront se concerter
Alors que les négociations portant sur la conclusion d’un accord de libre-échange entre le Canada et l’Union européenne entrent dans le dernier droit, le gouvernement fédéral et les provinces sont placés devant la difficile tâche de s’entendre sur les concessions qu’ils sont prêts à faire pour plaire à l’autre partie.
Group calls for more transparency in European trade negotiations
A group of concerned citizens is warning Canadians don’t know what they are in for as Canada inches closer towards a free trade deal with Europe.
Canada on track to clinch EU free-trade deal, Tories say
The Harper government says it’s successfully concluded an eighth round of free trade negotiations with the European Union and is on track to clinch a deal by 2012.
Perplexing silence hangs over proposed Canada, E.U. trade pact
When Canada’s premiers gather in Vancouver next week, it’s hard to imagine that the subject of trade talks with the European Union won’t come up. The potential ramifications of any deal for the provinces are enormous.
Canada still seeks reversal on seal ban
The Canadian government will not withdraw a challenge at the World Trade Organization despite a call from the European Union to abandon the fight over a ban on seal products, an official said Wednesday.
Trade deal a gamble for municipalities
Last weekend, municipal councillors from across Canada met in Halifax for the annual Federation of Canadian Municipalities convention. On the agenda were infrastructure renewal, how to best deliver social services, and how cities should confront climate change. But if you were following the FCM’s Twitter hashtag Saturday morning, you’ll have seen that trade was perhaps the most controversial topic of discussion, namely the Canada-EU free trade agreement.
Difficult moments coming for free trade negotiations between Canada and EU
The two sides will exchange the second version of their proposals in a few weeks. It will be followed in mid-July in Brussels with the eighth round of negotiations since discussions began in 2009.
Biggest Free Trade Deal Since NAFTA, Ghost Issue of 2011 Election
Most Canadians don’t know it, but our country is currently negotiating the biggest free trade contract since the North American Free Trade Agreement, a deal that could significantly increase drug prices, privatize our water, and outsource jobs easily done by Canadians to foreign multinational corporations. And none of the parties are talking about it.
Election postpones Canada-EU trade offers; now is the time to debate the deal, says Council of Canadians
The Council of Canadians is encouraged the federal and provincial governments have postponed an exchange of offers with the European Union before a seventh round of Canada-EU free trade negotiations next week.
Free trade deal with Europe threatens Canadian autonomy
Stuart Trew tells Redeye that Canadians have a lot to lose if the government signs a free trade agreement with Europe.