Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Start of a Bumpy Ratification Ride for CETA

Posted August 29, 2014

Although intended as celebration at having finalized terms of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union after years of negotiations, an official signing ceremony in Ottawa planned by the Harper Government for September 25-26 could also be viewed as marking the beginning of what promises to be a gruelling and uncertain ratification process.
News reports earlier this week by Reuters indicate that the multi-billion dollar trade pact – which is widely regarded as a blueprint for the much larger transatlantic free trade agreement being currently being negotiated between Brussels and Washington – faces mounting opposition from a range of EU lawmakers, many of whom are threatening to scupper the deal over issues they feel threaten the sovereignty of the EU’s 28 governments. Both trade deals must achieve a majority vote in the European Parliament in order to be ratified.

It should be noted that the European Parliament elections last May resulted in changes to the 751-seat chamber that could prove unhelpful to supporters of the Canadian trade accord; i.e., a modest increase in seats for parties likely to oppose CETA, a sharp decline in those that have previously backed CETA, and a significant increase in the parties and independent members that could possibly be swung on the issue.

The focus of concern for most of the lawmakers opposed to the deal is the controversial “investor-state dispute settlement” (ISDS) mechanism that conceivably enables corporations to sue governments under certain circumstances for loss of anticipated profit, something one Italian MEP scathingly described as being an “affront to democracy”.  European consumer and environmental groups claim the ISDS mechanism would, to quote Reuters, “allow multinationals to bully the EU’s 28 governments into doing their bidding regardless of environmental, labour and food laws and would set a bad precedent for the planned EU-U.S. trade pact.”