As the European Business Summit concluded earlier this month, it appeared that the Comprehensive Economic and Trade Agreement (CETA) – better known as the Canada-European Union free trade agreement – faced obstacles that may not only affect its ratification, but also the adoption of the Trans-Pacific Partnership, and the more ambitious U.S.-EU trade accord.
The June 23 “Brexit” referendum looms in the United Kingdom, and the prevailing political mood among European diplomatic circles is increasingly morose. According to those at the business summit, including EU council President Donald Tusk, Europe is going through a difficult and dramatic time that could by extension engulf CETA, the gold standard of trade agreements.
Moreover, there are impending legal challenges, coupled with the admission by EU Trade Commissioner Cecilia Malmstrom that she is unsure if CETA’s ratification can be concluded in the European Parliament, or obtain the required votes from all 28-member countries (including regional governments that are not in agreement with all aspects of the proposed accord).
In essence, two years after the agreement, CETA is in a state of limbo and the European Commission and Canada must carefully consider their next steps.
For Canada, the argument made by all sides is that CETA will pave the way to more complex and far-reaching trade accords with other trading partners. It has been suggested by Euroskeptics that the Canadian accord is the canary in the coal mine and that, should it fail, the demise of all other proposed larger trade deals will follow.
It has also been noted that the adoption of CETA bears political significance beyond narrow business interests and global free trade. The unique agreement is and should be representative of Canadian and European shared values as progressive and liberal societies. This point, however, has proved difficult to convey to all members of the European Parliament and national governments.
Canada, despite its good currency in European capitals, is now faced with engaging each EU member’s government on its own, as EU trade commissioner Malmstrom suggested at the summit that it was not the role of the commission to promote CETA’s adoption with EU member states or conduct the requisite public relations or lobby campaign.
This sobering assessment from the EU trade policy representative forces Canada to take charge of future CETA negotiations with the EU. Otherwise, the likelihood of the trade deal’s ratification may be in doubt.
Prime Minister Justin Trudeau has held orientation and strategy meetings with Canadian ambassadors. One assumes the prime minister suggested to Canadian diplomats that assuming a more aggressive CETA adoption campaign with the EU is necessary.
Canada is not the only economy at stake in the broader discussion of CETA. Rather, the global framework of existing and future accords, upon which world prosperity and peace are dependent, are at stake as well.
With European leaders unable to assume an enthusiastic leadership role, it’s also hoped by some that Trudeau’s rock star status can be put to good use as negotiations move forward between Canada and the EU.
With the attention of European leaders diverted to more troubling matters, renewed Canadian leadership on CETA is desperately needed.
Patrick C. Gagnon is Managing Partner of The Parliamentary Group and a former Liberal Member of Parliament. He was in Brussels for the European Business Summit.
