Canada-EU trade deal gets green light despite environmental concerns

The controversial EU-Canada free trade agreement (CETA) has received the backing it needs to provisionally enter into force on 1 March. Last week the European Parliament voted in favour of the deal by 408 to 254 votes – despite serious concerns that it privileges private investors and does nothing to support Europe and Canada’s climate commitments.

T&E has been critical of the exclusion of civil society and transparency from the process of reaching agreement on CETA, which was negotiated in total secrecy. Also a recent report by T&E and NGO ClientEarth found that the environmental chapter fails to encourage climate actions such as transitioning to renewable energy and does not reflect both parties’ commitments under the Paris climate agreement.

Cécile Toubeau, T&E director of better trade and regulation, said: ‘Our public representatives should not support a trade deal if it is a bad trade deal. Yet MEPs have rubberstamped an agreement with a toothless environment chapter that cannot be properly enforced and a tribunal system which will prioritise corporate interests.’

CETA’s special investment tribunals is are also highly controversial. The so-called International Court System (ICS) will only hear cases brought to court by corporations. The ICS allows companies to bypass national courts to pursue a financial payout from states over perceived damage to investments, which is often blamed on public policies intended to protect the environment. The court only allows corporations to launch a case; governments or citizens cannot start procedures against corporations.

However, the agreement must fully enter into force before the special investment tribunals can start operating. That will require ratification of CETA by 38 national and regional parliaments, which is expected to take two to three years.

But as most of the agreement can be provisionally applied from next month, T&E called for the immediate establishment of a CETA civil society forum. Composed of civil society organisations and other stakeholders selected by a transparent public application process, the forum could contribute to a constructive and open implementation of the trade deal.

Cécile Toubeau said: ‘Before we implement an agreement negotiated in secret by EU and Canadian officials, civil society must be given a say on its roll-out. Unlike its negotiation, CETA’s implementation must be done in a transparent and constructive manner.’

EU trade commissioner Cecilia Malmström hailed the plenary vote in favour of the agreement as ‘the start of a new era in EU-Canada relations’. But T&E said the last year of intense trade debates demonstrate that the classical argument of 'trade is good for growth' may no longer hold any truth. CETA and other ‘new generation agreements’ are no longer focused on tariffs but on aligning laws, which may have serious consequences for the environment.

Cécile Toubeau concluded: ‘The new debate must be on what type of trade agreements we want for Europe, a debate guided by the fundamental principles of complete transparency; trade to enable political priorities such as decarbonisation of our economies; and sound dispute resolution for all that respects the rule of European law. The European project, much like international trade is at a crucial turning point. To ensure the legitimacy of both, there needs to be a shift and refocus on developing a sustainable society that benefits everyone and first the most vulnerable.’