Abstract
The negotiation of the CETA between the EU and Canada took a surprisingly long time given the many common interests of the two parties. The final stages of the negotiation involved last minute changes, the decision to agree on provisional application and the threat of a veto from Belgium. This was in part due to public concerns concerning investor-state arbitration, to the political decision to treat CETA as a mixed agreement under EU law and due to the rather surprising understanding that even the decision to adopt CETA on a provisional basis was subject to a rule of unanimity. The second part of this paper considers the legal consequences of CETA and other mega-regional trade agreements on relations between parties inter se, relations with third party states and the complex implications of a decision to withdraw.
The author thanks Lukas Vanhonnaeker, PhD candidate McGill University for his assistance.
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Notes
- 1.
Comprehensive Economic and Trade Agreement between Canada and the European Union (CETA), signed 30 October 2016, to enter into force provisionaly on September 21, 2017.
- 2.
The negotiations were officially launched on 6 May 2009 at the Canada-EU summit in Prague.
- 3.
In particular, the CETA was negotiated as a result of a joint study by the European Commission and the Government of Canada titled “Assessing the costs and benefits of a closer EU-Canada economic partnership” that was released in October 2008. See http://trade.ec.europa.eu/doclib/docs/2008/october/tradoc_141032.pdf (last accessed 1 March 2017).
- 4.
Trans-Pacific Partnership (TPP), https://ustr.gov/trade-agreements/free-trade-agreements/trans-pacific-partnership/tpp-full-text (last accessed 1 March 2017).
- 5.
Regional Comprehensive Economic Partnership (RCEP), under negotiation.
- 6.
Transatlantic Trade Investment Partnership (TTIP), under negotiation.
- 7.
Framework Agreement for Commercial and Economic Cooperation Between Canada and the European Community, signed 6 July 1976, entered into force 1 October 1976, http://www.canadainternational.gc.ca/eu-ue/commerce_international/agreements-accords.aspx?lang=eng (last accessed 1 March 2017).
- 8.
Agreement between the European Economic Community and Canada concerning trade and commerce in alcoholic beverages, signed 28 February 1989, entered into force 28 February 2009, OJ 1989 L 71/42; Agreement Between Canada and the European Community on Trade in Wine and Spirit Drinks, concluded 16 April 2003, entered into force 1 June 2004, OJ 2004 L35/3.
- 9.
It is noteworthy, however, that most of these agreements were renegotiated after 2000.
- 10.
Joint Report on the EU-Canada Scoping Exercise, 5 March 2009, http://trade.ec.europa.eu/doclib/docs/2009/march/tradoc_142470.pdf (last accessed 1 March 2017).
- 11.
- 12.
After the negotiations were concluded on 1 August 2014 and the agreement presented on 25 September 2014 during the EU-Canada Summit in Toronto, the text became public on 26 September 2014.
- 13.
See http://europa.eu/rapid/press-release_STATEMENT-14-288_en.htm (last accessed 1 March 2017).
- 14.
EU-Singapore Free Trade Agreement, http://trade.ec.europa.eu/doclib/press/index.cfm?id=961 (last accessed 1 March 2017).
- 15.
Framework Agreement on Comprehensive Partnership and Cooperation between the European Union and its Member States, of the one part, and the Socialist Republic of Vietnam, of the other part, signed 27 June 2012, http://investmentpolicyhub.unctad.org/Download/TreatyFile/3244 (last accessed 1 March 2017).
- 16.
Partnership and Cooperation Agreement between the European Communities and Their Member States and Ukraine, signed 14 June 1994, entered into force 1 March 1998, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2430 (last accessed 1 March 2017).
- 17.
See CJEU, opinion 2/15, Request for an opinion submitted by the European Commission pursuant to Article 218(11) TFEU, OJ 2015 C 363/18. While the Court did not render its opinion, AG Sharpston rendered her opinion on this question on 21 December 2016. AG Sharpston considers that the Singapore Free Trade Agreement can only be concluded by the European Union and the Member States acting jointly. See AG Sharpston to CJEU, opinion 2/15, Singapore Agreement, ECLI:EU:C:2016:992. The CJEU rendered its decision on May 16, 2017. The decision is broadly in support of a wide reading of the EU's authority over foreign direct investment, but holds that authority over investor-state dispute settlement is largely reserved to Member States.
- 18.
See McGregor J, Canada-EU trade talks with Wallonia collapse as Freeland heads home, CBC New, 21 October 2016, http://www.cbc.ca/news/politics/canada-eu-ceta-brussels-friday-1.3815332 (last accessed 1 March 2017).
- 19.
Council Decision on the provisional application of the Comprehensive Economic and Trade Agreement (CETA) between Canada, of the one part, and the European Union and its Member States, of the other part, 2016/0220 (NLE). The Canadian bill to implement CETA was granted royal assent in May 2017 and the EU Parliament approved CETA in February 2017.
- 20.
See Déclaration du Royaume de Belgique relative aux conditions de pleins pouvoirs par l’Etat fédéral et les Entités fédérées pour la signature du CETA, http://ds.static.rtbf.be/article/pdf/ceta-belgique-ok-1477479201.pdf (last accessed 1 March 2017).
- 21.
Generally designated as regional trade agreements (RTAs) by the World Trade Agreement (WTO).
- 22.
The TPP negotiations were concluded and the text has been signed in Auckland, New Zealand on 4 February 2016. Subsequently, President Trump withdrew the signature of the United States.
- 23.
Transatlantic Trade and Investment Partnership, currently under negotiations.
- 24.
The TPP negotiations were concluded and the text has been signed in Auckland, New Zealand on 4 February 2016.
- 25.
The expression regional trade agreement is used by the WTO database to cover all bilateral and plurilateral trade agreements whether customs unions or free trade agreements; the expression “preferential trade agreements” (PTAs) is used by the WTO to cover the relatively small number of non-reciprocal aid agreements.
- 26.
Additional Protocol to the Treaty of Asuncion on the Institutional Structure of Mercosur, entered into force 29 November 1991.
- 27.
ASEAN Free Trade Agreements, signed 28 January 1992, http://www.worldtradelaw.net/fta/agreements/afta.pdf (last accessed 1 March 2017).
- 28.
Codification of the Andean Subregional Integration Agreement (Cartagena Agreement), 25 June 2003, http://www.worldtradelaw.net/fta/agreements/cartagenafta.pdf (last accessed 1 March 2017).
- 29.
See e.g. Southern African Development Community (SADC) Free Trade Agreement, signed 17 August 1992, entered into force 5 October 1992, http://www.worldtradelaw.net/fta/agreements/sadcfta.pdf; Common Market for Eastern and Southern Africa (COMESA), signed 5 November 1993, http://www.worldtradelaw.net/fta/agreements/comesafta.pdf; East African Community Free Trade Agreement, http://www.worldtradelaw.net/fta/agreements/eacfta.pdf; Economic Community of West African States (ECOWAS) Revised Treaty, http://www.worldtradelaw.net/fta/agreements/ecowasfta.pdf; Economic and Monetary Community of Central Africa (CEMAC), http://www.worldtradelaw.net/fta/agreements/cemacfta.pdf (all last accessed 1 March 2017).
- 30.
- 31.
Article 30.8(1) CETA.
- 32.
Article 30.8(7) CETA.
- 33.
Article 30.8(8) CETA.
- 34.
Article 30.8(7) and (8) CETA.
- 35.
Article 30.8(3) and (4) CETA.
- 36.
Article 30.8(6) CETA.
- 37.
North American Free Trade Agreement (NAFTA), signed 17 December 1992, entered into force 1 January 1994.
- 38.
Free Trade Agreement between Canada and the United States of America, signed 2 January 1988.
- 39.
Free Trade Agreement between Australia and the United States of America, signed 18 May 2004, entered into force 1 January 2005, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2682 (last accessed 1 March 2017).
- 40.
Chapter 9, Section B TPP.
- 41.
See http://investmentpolicyhub.unctad.org/IIA/CountryBits/105#iiaInnerMenu (last accessed 1 March 2017).
- 42.
ASEAN Comprehensive Investment Agreement, signed 26 February 2009, entered into force 29 March 2012, http://investmentpolicyhub.unctad.org/Download/TreatyFile/3095 (last accessed 1 March 2017).
- 43.
European Parliament, CETA: MEPs back EU-Canada trade agreement, Press release, 15 February 2017.
- 44.
Annex 20-A CETA.
- 45.
Article 29.5 TPP.
- 46.
Articles 9.4 and 9.5 TPP.
- 47.
Chapter B, Annex 300-B (Textile and Apparel Goods) NAFTA.
- 48.
Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments, signed 9 September 2012, entered into force 1 October 2014, http://investmentpolicyhub.unctad.org/Download/TreatyFile/3476 (last accessed 1 March 2017).
- 49.
Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, signed 5 December 1996, entered into force 5 July 1997, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2456; Free Trade Agreement between Canada and Peru, signed 29 May 2008, entered into force 1 August 2009, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2568; Free Trade Agreement between Canada and Colombia, signed 21 November 2008, entered into force 15 August 2011, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2569 (all last accessed 1 March 2017).
- 50.
See http://investmentpolicyhub.unctad.org/IIA/CountryBits/223#iiaInnerMenu (last accessed 1 March 2017).
- 51.
See Solis M, South Korea’s Fateful Decision on the Trans-Pacific Partnership, Brookings, 18 September 2013, https://www.brookings.edu/research/south-koreas-fateful-decision-on-the-trans-pacific-partnership/ (last accessed 1 March 2017).
- 52.
CETA.
- 53.
Economic Partnership, Political Coordination and Cooperation Agreement between the European Community and its Member States, on the one part, and the United Mexican States, on the other part, signed 27 February 2001, entered into force 1 March 2001, http://investmentpolicyhub.unctad.org/Download/TreatyFile/2409 (last accessed 1 March 2017).
- 54.
EU-Singapore FTA.
- 55.
EU-Vietnam FTA.
- 56.
Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, signed 27 June 2014, entered into force 1 January 2016, http://investmentpolicyhub.unctad.org/Download/TreatyFile/3123 (last accessed 1 March 2017).
- 57.
See e.g. CJEU, case 167/73, Commission v French Republic, ECLI:EU:C:1974:35; CJEU, case 13/83, Parliament v Council, ECLI:EU:C:1985:220; CJEU, joined cases 209/84 to 213/84, Ministère public v Asjes, ECLI:EU:C:1986:188.
- 58.
See e.g. the first package of Regulations and Directives, OJ 1987 L 374/1; the second package of Regulations and Directives, OJ 1990 L 217/1; and the third package of Regulations and Directives, OJ 1992 L 240/1.
- 59.
Articles 206 and 207 TFEU.
- 60.
EU-Singapore FTA.
- 61.
EU-Vietnam FTA.
- 62.
CETA.
- 63.
See WTO, Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade, https://www.wto.org/english/docs_e/legal_e/10-24.pdf (last accessed 1 March 2017); Appellate Body Report, Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/AB/R, 22 October 1999.
- 64.
- 65.
See e.g. Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, 6 March 2006; Panel Report, Argentina – Definitive Anti-Dumping Duties on Poultry from Brazil, WT/DS241/R, 22 April 2003.
- 66.
Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products, WT/DS457/AB/R, 20 July 2015.
- 67.
Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, 3 December 2007.
References
de Mestral A (2013a) Dispute settlement under the WTO and RTAs: an uneasy relationship. J Int Econ Law 16(4):777–825
de Mestral A (2013b) The role of the Canadian provinces in the negotiation of the CETA: Canadian and European perspectives. In: Bungenberg M, Reinisch A, Tietje C (eds) EU and international investment agreements – open questions and remaining challenges. Nomos, Baden-Baden, pp 145–164
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de Mestral, A. (2017). Negotiating CETA with the European Union and Some Thoughts on the Impact of Mega-Regional Trade Agreements on Agreements Inter Partes and Agreements with Third Parties. In: Bungenberg, M., Krajewski, M., Tams, C., Terhechte, J., Ziegler, A. (eds) European Yearbook of International Economic Law 2017. European Yearbook of International Economic Law, vol 8. Springer, Cham. https://doi.org/10.1007/978-3-319-58832-2_14
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