EU trade commissioner expects CETA to largely ‘pass smoothly’

Share

The European Union's trade commissioner says she's confident the most contentious part of the Canada-EU trade accord – an investment court where businesses can sue governments – will survive a rocky ratification process by the 28-country economic bloc and come into force.

Cecilia Malmstrom was in Ottawa Monday to speak in support of the Comprehensive Economic and Trade Agreement (CETA), the bulk of which is expected to take effect as early as April.

One notable exception is the investment court, also known as the investor-state dispute settlement mechanism, which sets out formal arrangements for how businesses can sue governments when state decisions affect their investments.

It has been a target of criticism and protests during the more than eight years that the Canada-EU deal was in negotiations and cannot go into effect until legislatures in all 28 countries approve it – 38 parliaments across Europe when both national legislatures and regional bodies and chambers are included.

Last October, the European Council, representing all 28 member-state governments, reached the necessary consensus to approve the CETA deal. And last month, the European Parliament voted to support the deal. These two steps mean about 95 per cent of the agreement, including tariff reductions and the lowering of other trade barriers, can take effect.

Ms. Malmstrom told reporters Tuesday that it is only a "matter of time" before all 28 countries ratify the deal. "All countries have promised to do their utmost to get this through their national parliaments," she said.

She said she foresees no obstacles to ratifying CETA in more than 75 per cent of EU countries. "I would say that in 20 to 22 countries, absolutely not a problem – it will pass smoothly," she told reporters.

In the remainder of EU member states, such as Belgium, there is more resistance to legislator approval.

"There [have] been some countries where this is controversial. It is calming down a little bit," she said.

She took time in her Tuesday speech to mount a defence of open markets – a stark contrast to the sweeping protectionism championed by the new administration in the United States.

"In an age when some doors are closing, we are clear to the world that ours are open. We are building bridges, not walls. Canada and Europe are developed democracies that share many views and values," Ms. Malmstrom said.

The Canada-EU deal will eliminate duties on tens of thousands of products – covering more than 95 per cent of everything Canada sells to Europe – and dismantle many non-tariff barriers to commerce.

It will give Canada's auto assemblers and beef and pork producers significant access to EU markets.

The previous Conservative government began negotiations on CETA in 2009, and an agreement in principle was reached in 2013 – with a text prepared by September, 2014.

Even then, however, fears about the investment court in countries such as Germany and Belgium blocked final approval from Europe.

Prime Minister Justin Trudeau's government agreed to refashion this feature of CETA. It consented to creating a standing list of Canadian and European judges to adjudicate disputes, instead of referring the matter to third-party arbitrators, and it reduced the power that investors would have in this court.

Want to interact with other informed Canadians and Globe journalists? Join our exclusive Globe and Mail subscribers Facebook group