Approval for trade deal with Canada no done deal for European Parliament

Approval of the Canada-EU Trade Agreement (CETA) by the European Parliament is far from certain. The agreement negotiated by the European Commission and presented to the plenary in Strasbourg 16 September 2014 was questioned by representatives of the European Left, the Green Party and the large party group of the European Socialists and Democrats (S&D). Prospects for approval are shaky, one S&D member said during the heated debate with outgoing EU Trade Commissioner Karel de Gucht the day before yesterday. The main concern: the extrajudicial Investor-State Dispute Settlement mechanisms (ISDS).

Representatives from the Stop TTIP petition warn that ISDS could for example allow software companies to challenge the less-software-patent-friendly EU rulings of the European patent system. Moreover, further developments in data protection might be banned as a potential non-tariff trade barrier, the activists fear.

De Gucht: Commission can be proud

De Gucht was eager to underline the plus points of the deal brokered with Canadian negotiators. Elimination of all tariffs, market access for EU products to the Canadian market and access to the public procurement market, while at the same time both sides agreed that some agrarian products would still be protected and public services could still be subsidised.

The EU Commissioner said that CETA conclusion would be officially announced by the President of the EU Commission, Manuel Barroso, and the Canadian Prime Minister, Stephen Harper, at the EU-Canada summit in Ottawa on 26 September 2014. Both parties would then send it off for approval by the legislators, including the EU parliament and the Council of member states from there. Translation into the EU member states official languages would still take until the beginning of the next year, he said.

De Gucht described CETA as a success and true win-win compromise. EU companies would be in a “better position than US companies on the Canadian market” and the deal would “not come at the cost of social, environmental or labour standards” where Canada had instead agreed to do “more than before”.

“Indeed, CETA is deeper in ambition and broader in scope than the historic North American Free Trade Agreement (NAFTA),” the Canadian negotiators explain on their website.

De Gucht especially underlined that Canada has agreed to the protection of geographical indications. “Parmigiano and Schwarzwälder Schinken” would be “fully protected,” he said. The protection of those indications was one of the essentials from a European point of view. It would help especially small and medium companies, the Commissioner said, and certainly it is something the EU negotiators might like to have as a reference point for their ongoing negotiations over the Trans-Atlantic Trade and Investment Partnership, the much debated trade deal with the US.

A model agreement, also for ISDS?

It is the very model character of CETA with regard to another set of provisions that resulted in much objections from the members of the EU parliament yesterday: the provisions about ISDS. ISDS is a mechanism that allows investors to challenge states before private (extrajudicial) arbitration panels when they judge new regulation to harm their investment.

Even liberal politician Marietje Schaake who acknowledged CETA might mitigate problems for EU companies stemming from the cut in trade with Russia, said: “The key question whether ISDS is necessary between two democracies where rule of law is granted has not been answered.” ISDS had originally been crafted in deals with countries without established judiciary systems. Members of the S&D, the Green Party and the European Left (GUE/NGL) all warned against allowing big companies to draw states before the arbitrators over new environmental legislation for example.

Helmut Scholz (GUE/NGL) warned that even investment in speculative financial products would be protected. Green Party member Yannick Jadot warned against including investment in the deal instead of having it focussed on trade, while even there from an environmentalist point of view there were a lot of questions on how farms in a country like France would be able to compete with their ten times larger competitors from Canada.

Dispute over changes in deal looming

CETA was “unacceptable” as long as ISDS was in, several S&D members underlined during the debate yesterday. “The majority to pass CETA is shaky, if the S&D votes against it,” warned Austrian S&D member Jörg Leichtfried. Many parliamentarians are especially angry about the fact that the Commission, by polishing the CETA deal with the inclusion of ISDS, did not honour the comments sent by over 150.000 European organisations and individual citizens.

De Gucht rebutted the critic from the members of parliament and pointed out that Council and Parliament had included ISDS in the original negotiation mandate and also expressed scepticism at the public ISDS consultation. The first analysis of the public consultation showed that more than 50.000 of the 150.000 comments received were identical and also had circumvented the system and not answered 12 mandatory questions. “That of course makes it very easy to get 50.000 identical answers. “You could have 500.000 – why not?,” De Gucht said. In August, de Gucht according to a report by EDRI had complained that 100.000 answers were identical.

More concerns and next steps

ISDS, contrary to the critical remarks of De Gucht, are not the only concern over the free trade agreement negotiations. Beside the environmental questions, questions about how it really would affect smaller companies, there is the huge dispute over the whole style of classical, closed door trade negotiations. Lack of transparency, even when it comes to the parliament has been a complaint since the failed ACTA.

Will the new Commission be prepared for a change? Would CETA fail in parliament, it certainly would be a signal that there has to be change. Perhaps the next Commission will prefer to make an attempt to take out ISDS - the next President of the Commission, Jean-Claude Juncker, already has signalled, that he is no fan of it – to save the ability of the Union to negotiate trade deals. Would CETA fail, the EU negotiators would lose their face as predictable negotiators of old-style trade deals.

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