EU and Canada sign landmark free trade deal

The Comprehensive Economic and Trade Agreement must still clear some 40 national and regional parliaments in Europe in the coming years to enter fully into force.

Photo by: Reuters
Photo by: Reuters

The deal would allow Canada to reduce its reliance on the neighbouring United States as an export market.

The European Union and Canada signed a long-delayed free trade agreement on Sunday that aims to generate jobs and drive economic growth.

The signatures took place following weeks of uncertainty due to opposition from a small Belgian region. But the deal must still clear some 40 national and regional parliaments in Europe in the coming years to enter fully into force.

"All's well that end's well," said European Commission President Jean-Claude Juncker after overseeing the signing of the treaty by Canadian Prime Minister Justin Trudeau and the heads of EU institutions.

"We have 20 ongoing negotiations and today we are fixing the global standards the European Union and the European Commission want others to accept."

The Comprehensive Economic and Trade Agreement's (CETA) passage has not been smooth. It has been in the works for seven years and was also held up at the last minute

French-speakers in Wallonia in southern Belgium, a minority likely to be affected by CETA, raised objections that stalled the deal until a breakthrough on Thursday, confirmed by regional parliamentary votes on Friday.

The Canada agreement is seen as a springboard to a larger EU deal with the United States, known as the Transatlantic Trade and Investment Treaty (TTIP), which has been the target of labour unions and environmental and other protest groups.

EU Trade Commissioner Cecilia Malmstrom said TTIP talks were not dead, contrary to what some politicians in Germany and France have said, but would need to wait for the next US president - taking office in January - to resume.

Supporters say CETA will increase Canadian-EU trade by 20 percent and boost the EU economy by 12 billion euros ($13 billion) a year and Canada's by C$12 billion ($9 billion).

For Canada the deal is important to reduce its reliance on the neighbouring United States as an export market.

For the EU, it is a first trade pact with a G7 country and a success plucked from the jaws of defeat at a time when the bloc's credibility has taken a beating from Britain's vote in June to leave after 43 years of membership.

"This has been a very long process. A huge majority of people in Europe are in favour of Europe, but there are concerns and we need to engage with them," Malmstrom said. "The Commission cannot do that alone."

Some 100 anti-globalisation protesters clashed with police outside the venue in Brussels, trying to break down barriers in front of the main entrance and hurling red paint.

Sunday's signing will not be the last act.

The full implementation, which would include a contentious investment protection system, will ensue only after clearance by more than three dozen national and regional parliaments.

The Belgian experience shows this outcome is no given, but Trudeau said provisional application would unlock 98 percent of CETA's key measures and that consumers and businesses would immediately feel its benefits.

"We are confident that demonstrating that trade is good for the middle classes (...) will make sure that everybody gets that this is a good thing for our economies and that it is also a good thing for the world," Trudeau said.


The main focus of protests against CETA and TTIP remains the system to protect foreign company's investments. Critics say its provision for arbitration panels to rule on disputes with states can be abused by multinational companies to dictate public policy, such as on environmental standards.

The EU and Canada say their investment protection system guarantees the right of governments to regulate, make use of independent judges and be more transparent.

The deal will eliminate tariffs on almost 99 percent of goods. The beneficiaries would include, for example, carmakers or the EU textile sector, for which Canadian duties of up to 18 percent can be imposed at present.

Service companies could also benefit and EU companies would be able to tender for public contracts at Canadian provincial and municipal level, the first time Canada has offered this.

TRTWorld and agencies