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Beyond Europe

piksel

piksel

03 October 2014

CETA, TTIP: One down, one to go...

author Maya Rostowska

Last Friday, in an event filled with pomp and ceremony on Parliament Hill in Ottawa, the outgoing President of the European Council Herman Van Rompuy and President of the European Commission José Manuel Barroso, together with Canadian Prime Minister Stephen Harper, announced the end of negotiations of the Canada-EU Comprehensive Economic and Trade Agreement (CETA).

The deal was a long time coming. Talks began in 2009, when both sides committed to a “very comprehensive liberalisation” for trade and investment. When Canada’s Chief Negotiator Steve Verheul visited PISM in January this year, he seemed confident the deal would be done within a month.

With negotiations now finally completed, it remains for both sides to begin their respective approval processes. This ought to be a formality in Canada, as all the provinces agreed to implement CETA before negotiations were launched. In Europe, despite potential delays caused by the process of translating the text into the EU’s 23 official languages, the deal can be expected to be relatively seamlessly approved by Member States. Nevertheless, it may not come into full effect before 2016.

Despite some grumblings from farmers that the EU side did not achieve all it could have in terms of market access for agricultural goods, CETA is relatively uncontroversial in Europe (see PISM Strategic File “Trade Agreements across the Atlantic: What Lessons from CETA for TTIP?”). Problems that have plagued the EU-U.S. free trade agreement (TTIP), such as the much-maligned investor-state dispute settlement (ISDS) issue, have been dealt with rather neatly in the Canadian deal, with negotiators coming up with a compromise that provides more protection for governments’ right to regulate while simultaneously creating a good environment for investment.

For Poland, Canada presents many economic opportunities (see PISM Bulletin “Canada: A Land of (Missed) Opportunity for Polish Business?”). Exporters of machinery and transport equipment, chemicals and furniture can expect to do particularly well there. There are also opportunities for clothing retailers, cosmetics manufacturers and food producers. Mining and energy are huge sectors in Canada, and Polish companies have already begun investing there. There are hopes that the new trade agreement will encourage Polish companies, which rarely venture further than the EU and its eastern neighbours, to spread their wings and do business across the Atlantic.

The conclusion of CETA negotiations came in the nick of time: in a matter of weeks, Van Rompuy will be replaced by Donald Tusk and Barroso by Jean-Claude Juncker. It means the current European Commission and Council presidents will leave office with at least one transatlantic trade agreement under their belts. 

As for TTIP, it was initially supposed to be concluded “on one tank of gas”, and there were hopes it would be passed by the old Commission. Now the onus is on the new team in Brussels to guide the deal through. With the political mood souring and public opinion increasingly turning against the deal (the European Commission received almost 150,000 submissions in its open consultation on ISDS in TTIP), that may turn out to be much easier said than done.

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