The European Union has backed off a controversial plan to fast-track a massive trade deal with Canada and will instead give its member states the final say on ratifying it after the proposal threatened to become a flashpoint in post-Brexit EU politics.
But Canada's International Trade Minister Chrystia Freeland nevertheless says the agreement is still on track and she remains confident that approximately 90 per cent of the deal will be in place and functioning by 2017.
That's because she says she expects the Canada-EU trade deal to receive necessary preliminary approval next year from EU legislators, whose jurisdiction includes the vast majority of the agreement.
The pact, known as the Comprehensive Economic and Trade Agreement, or CETA, has been in the works for seven years and has wide support among EU leaders. But it has run into fierce opposition in several countries, notably France and Germany – dissent Canada has tried to assuage by renegotiating a controversial mechanism that sets out how and when investors can sue governments.
On Tuesday, the European Commission, the executive branch of the EU, kick-started the ratification process by formally proposing the continent-wide organization sign and conclude the Canada-EU deal. The three-step approval starts with the EU Council, akin to the European Union presidency, this fall, and continues with a vote by the 751-member European Parliament by late 2016 or early 2017.
Once it passes the EU Parliament, a 2017 implementation date would be set and the agreement would go into effect on what is called a provisional basis. This would be the 90 per cent of the deal under the supranational control of the EU itself.
The Canada-EU deal, the biggest this country has concluded in decades, would eliminate duties on tens of thousands of products, covering more than 95 per cent of everything Canada now sells to Europe, as well as dismantle a raft of non-tariff barriers to commerce. It would provide Canada-based auto assemblers, as well as beef and pork producers, with significant access to EU markets.
Anxiety about the future of this deal has grown after Britain's surprising vote to quit the EU and with lingering opposition to the agreement in countries such as Germany and France.
EU President Jean-Claude Juncker warned member countries Tuesday of how vital it is that the deal be approved at all levels, calling it "our best and most progressive trade agreement" and emphasizing that it should enter into force "as soon as possible" across the economic union.
"Now it is time to deliver. The credibility of Europe's trade policy is at stake."
Brussels, meanwhile, shelved a bid to speed through ratification without approvals in each national parliament. Mr. Juncker recently proposed this to speed up adoption – but German Vice-Chancellor Sigmar Gabriel publicly rejected this last week, declaring: "To decide now that the national parliaments have nothing to say to this trade agreement is incredibly foolish." He warned this would only serve to magnify "conspiracy theories" about the deal.
It will be up to each country to ratify the deal, and the 10 per cent, or so, of the deal that is under national purview in each country would come into force after each member state issues its own approval. Canadian officials said there is no time limit for these ratifications but estimated it could take two years.
Still, the deal's unpopularity in Germany and France leaves open the possibility that national legislators in Paris and Berlin might reject the pact – an outcome that could fatally discredit the Canada-EU agreement.
Ms. Freeland said she has met with key politicians in many European capitals and found strong support for the deal. She said the British decision to quit the EU has heightened the importance of this deal.
"CETA has actually taken on a deeper significance now because it has this additional political significance [for] the Europeans who are looking for ways to show that Europe is able to act."
Ms. Freeland said she will be speaking in favour of the Canada-EU deal at a conference of the Social Democratic Party of Germany later this year. This party is part of the governing coalition in Germany and has been a major source of criticism of CETA.
The Canada-EU deal has been caught up in a growing anti-trade movement across much of Europe. Concerns are mounting in many European countries about free trade in general and continuing negotiations between the United States and the EU over the Transatlantic Trade and Investment Partnership, or TTIP, which is modelled largely on CETA.
German protest groups have also gathered more than 70,000 names on a petition against the agreement and demonstrations opposing CETA and TTIP have drawn more than 100,000 people in Berlin and elsewhere. French President François Hollande has also called for CETA to be ratified by each EU country as protests there gather steam.
A group leading protests against the Canada-EU deal in Germany is preparing legal action to stop Berlin from allowing the agreement to provisionally come into force once approved by the European Parliament.
"It would be a democratic scandal to circumvent parliaments," Roman Huber, CEO of Mehr Demokratie, or More Democracy, said. "We think that this [agreement] is against the German constitution and therefore we are preparing a legal challenge against provisional application and against certain contents of CETA which would endanger democracy."