Gabriel Attal and Justin Trudeau will have a lot to say to each other during the French Prime Minister’s visit to Canada from April 10 to 12. Although their meeting will allow them to cover a number of topics, the rejection of CETA — the Comprehensive Economic and Trade Agreement between Canada and the European Union — by the French Senate on March 21 will surely occupy a prominent place in their conversations. These two great defenders of the agreement will undoubtedly wonder how it can be saved.
We should be concerned about this vote by the French Senate, but not for the reasons mentioned by Trudeau and Attal. CETA has never been what was expected of it, whether from the point of view of the Harper government, which negotiated it, or that of the Liberal government, which found it necessary to characterize it as ” progressive” without making substantial changes to the text. The multi-party opposition to CETA in France — from the Greens, the Communists, the Socialists and the Right — is a sign that democracy is functioning well. The resulting setback is also a welcome opportunity to carefully reexamine the agreement.
Since CETA came into force almost seven years ago, bilateral trade in goods and services between Canada and the EU has increased moderately, with a significant benefit for European exports reflected in the Europe’s growing trade surplus. Much of the increase in Canadian exports is in products such as oil and raw minerals, which were not subject to tariffs before the agreement was adopted. A recent report from the Veblen Institute also demonstrates the negative effects of CETA on the environment, since it increases, among other things, trade in sectors that emit a lot of greenhouse gases.
Canadian food importers have quickly filled CETA’s expanded quotas for duty-free European cheeses, directly encroaching on the market of Canadian dairy producers and processors. Federal and provincial subsidies given to local dairy producers to offset these losses offset the modest commercial gains that other sectors were able to reap from the agreement.
On the other hand, Canada’s influential meat and food groups, with government support, are attempting to use a committee system included in CETA to pressure the EU to allow Canadian meat products from entering the European market without respecting Europe’s stricter animal health and welfare rules. CETA’s environmental rules are weak and unenforceable, especially compared to those adopted in more recent agreements. The European Commission, for its part, continues to resist demands from unions for stricter application of the treaty’s labor provisions.
Additionally, Canada and the European Commission are quietly changing CETA investment rules and expanding the investment tribunal system to increase the use of international arbitration, rather than domestic courts, to resolve disputes between investors and the State. This activity is highly suspect given widespread international opposition to this type of arbitration, particularly in Europe.
In Germany, among others, hundreds of thousands of people took to the streets to protest against CETA in September 2016. The same year, in a vibrant plea, the Belgian state of Wallonia highlighted the extent to which the agreement was imposed without much democratic debate. A broad coalition of European organizations strongly opposes CETA’s investor-state dispute settlement mechanism (called the Investment Court System) being put in place. The anger of French farmers showed how difficult it was to impose constraints to protect the environment in a context of free trade.
The French Senate’s decision not to ratify CETA was not taken lightly. The clear majority vote (211 votes to 44) was the result of a genuine democratic debate on the problems linked to the agreement, and more. The senators took into account a significant citizen mobilization which took place for years in different European countries. CETA will now have to be the subject of a second vote in the French National Assembly, the result of which must be respected by Mr Macron and transmitted to the European Commission. If the deal is rejected again, it is possible that CETA will be suspended.
The governments of Justin Trudeau and Emmanuel Macron seem ready to ignore all this discontent. This would be a political error. It would then be a new exercise in remodeling a decidedly unprogressive trade agreement dating from a bygone era. Trudeau and Attal should instead ask themselves what they can gain by defending an unpopular agreement, whose modest gains in a few sectors are not enough to offset the damage done elsewhere.