The European Parliament has voted in favour of the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada and taken another defiant step toward greater free trade in the face of growing protectionism.
The vote split came in at 408 members saying ‘yes’, 254 ‘no’ and 33 abstentions.
Trade commissioner Cecilia Malmström says: “This vote is the start of a new era in EU-Canada relations. By building bridges rather than walls, we can face the challenges that confront our societies together. In these uncertain times, with rising protectionism around the world, CETA underlines our strong commitment to sustainable trade.”
The Canadian parliament will now also ratify the agreement, after which provisional application of the pact will come into play.
According to the European Commission (EC) CETA will get rid of almost 99% of tariffs, saving European companies over €500mn a year. Last October, the EU and Canada signed the trade agreement, which has now been formerly ratified by the EP.
Despite Canada having similar ideals and commitments to open markets and social policies as the EU, the agreement has faced much resistance. Opposition to the deal, and similar ones like the Transatlantic Trade and Investment Partnership (TTIP), has been growing among public and professional bodies, who argue that these deals will hinder standards on products and markets as well as on climate and environmental policies adopted in the EU.
A major sticking point to the deal has been the inclusion of the investor-state dispute settlement (ISDS) mechanism, which allows companies to sue countries over any new law or policy that they consider to be discriminatory towards their investments. Critics argue this will undermine national governments and public interest in favour of investment strategies of big multinational corporations.
On the back of these concerns, the ISDS system has now been replaced with a new investment court system (ICS). The new mechanism will be a public one, with professional and independent judges and transparent procedures, including open hearings and publication of documents submitted during cases, says the EC.
However, since the ICS is a new feature, it still needs ratification by member states and is therefore excluded during the provisional application phase.
The CETA agreement itself will now face debate and ratification by both national and regional parliaments of each member state, a process which could take years. It is hoped that provisional application will highlight the benefits and overcome opposition.